Economists project 13-percent GDP drop in second half of 2020

After the Brazilian Institute of Geography and Statistics announced this Friday that Brazil’s GDP experienced a 1.5-percent drop in Q1 2020, economists from public and private institutions reassured newspaper Folha de S.Paulo that the Brazilian economy was already projected to “go out of breath” during this period. The real numbers, however, are more alarming than previous projections.

For the six consulted economists, who work for some of the country’s largest financial institutions, the main impact of the pandemic is yet to come. While Itaú Unibanco expects a 10.6-percent decrease in GDP in the second half of 2020, Goldman Sachs and Banco ABC project a 12.9-percent and 12-percent drop, respectively.

The economists point to the lack of an early lockdown as the main reason for the late impact in the economy. “Although the economy was not doing great in January and February, we would not see a drop in GDP if it were not for the quarantine,” says Luana Miranda, a researcher at the Brazilian Economy Institute of the Fundação Getúlio Vargas. According to her, the country should not expect to see a “pre-coronavirus” economic scenario before 2022.

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