Central Bank estimates 11-percent GDP drop for Brazil in Q2

The Brazilian economy shrunk 10.94 percent in the Q2 2020, feeling the full effects of the coronavirus pandemic, according to the Economic Activity Index (IBC-Br) published by the Central Bank this Friday.

But the data released by the monetary authority also shows signs of economic recovery. In June, the economy registered 4.89-percent growth when compared to May. The previous month had already seen positive figures, after sharp falls in March and April. 

The near-11-percent fall for the second quarter comes after a 1.5-percent contraction in Q1. If official GDP results confirm the fall for Q2, Brazil will enter into a technical recession.

The IBC-BR index, published monthly by the Central Bank, is seen as a preview of GDP figures, which will be published on September 1. 

Currently, the government projects a 4.7-percent fall in Brazilian GDP for 2020. The financial market, meanwhile, predicts a fall of 5.62 percent, according to the most recent Central Bank Focus Report, a weekly survey of major financial institutions.

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