RIO DE JANEIRO, BRAZIL – According to projections from the Federation of Industries of the State of Rio de Janeiro (FIRJAN), the economy of the State, in the midst of a recovery, will undergo a consolidation process in 2020, with a 2.1 percent growth in Gross Domestic Product (GDP).
The report states that the extractive industry will increase by 2.9 percent. A 1.8 percent growth is also expected in the manufacturing industry which means a significant increase considering there was a 0.9 percent drop in 2019.
According to Jonathas Goulart, FIRJAN’s manager of Economic Studies, traditionally activities in Rio were boosted by the public sectors, through an increase in government spending or tax relief. This time, however, there is no budgetary leeway for that to happen.
“This makes the recovery more consistent, which is positive, but at a slower pace, because the private initiative needs to understand the direction of the economy to actually make the planned investments.
This scenario is similar to what Europe experienced following the 2008 crisis, which led the continent’s countries to a severe fiscal situation,” Jonathas says.
According to Goulart, manufactured goods will likely see a decline in exports to Latin America, particularly Argentina. In contrast, expectations are good for the Oil and Gas sector and for the manufacturing industry that exports to other states in Brazil.
Another prominent factor includes Construction. In 2019, the sector started a rebound process, which will also be consolidated in 2020.
As a result, the negative cycle that occurred between 2015 and 2018 will come to an end.