The coronavirus pandemic has caused profound impacts on the Brazilian economy, but experts believe that the country’s GDP contraction in Q2 may not be quite as severe as once feared.
The Central Bank released its monthly report on economic activity for April, showing a drop of 9.73 percent in comparison to the prior month, hampered by social isolation measures that brought production, sales, and services to a near standstill.
Despite the large drop, some sectors softened the blow and signs of recovery were seen in May and June, according to major bank Itaú’s daily activity measurements. Itaú economist Luka Barbosa told newspaper Valor that preliminary estimates show an increase of industrial production of around 6 percent over the last 30 days, and that wholesale commerce figures jumped some 10 percent. “The drop in GDP for the second quarter will be large, but not so pronounced,” he said.
The contraction for Q2 was estimated as 15 percent, but experts believe it will be closer to 10 percent.Support this coverage →