RIO DE JANEIRO, BRAZIL – The Brazilian economy shrank 1.5 percent in Q1 this year, according to data released by the Brazilian Institute of Geography and Statistics (IBGE) on Friday, May 29th.
The downturn is less intense than in European countries such as Germany, France, Italy, and Portugal, and is also lower than in China, which experienced the highest slump to date, at 9.8 percent.
The first three months of the year were marked by the start of social distancing measures in much of the world, with the aim of containing the spread of the novel coronavirus. In Brazil, the measures were only implemented in the quarter’s last fortnight. Before that, the impact of the pandemic on other countries was already starting to affect the Brazilian economy.
Among the world’s leading economies, China recorded the highest slump in quarterly GDP, at 9.8 percent. The Asian country was the first novel coronavirus hotspot.
In the Euro Zone, the second focus of the international crisis, there was a 3.3 percent contraction. Even Sweden, a country that did not embrace isolation, saw its GDP decline in the period (-0.3 percent).
Countries where the virus spread started later, such as Brazil, were less economically impacted. In the USA, GDP dropped 1.2 percent in the quarter.
According to data collected by the OECD, among the 50 most significant economies, only two recorded growth in the quarter. Finland grew only 0.1 percent. Chile grew three percent in the period, but its result is based on comparison, as the Chilean economy had its worst performance for Q4 2019 among the selected countries.
GDP is a measure of the country’s production of goods and services in a given period, and its increase is used as a synonym for economic growth.
Brazil has been undergoing a three-year period of poor economic growth. Analysts expect that in this year’s Q2, marked by almost two complete months of social isolation in most of the country, the economy will contract even further.
This is due to the fact that in the first three months of the year, only the second half of March was affected by social isolation. The prior period was more affected by the shutdown of other countries and the consequent drop in the supply of products by trading partners.
According to an analysis published by economist Marcel Balassiano, from IBRE’s Applied Economics area (Brazilian Institute of Economics of FGV), 82 percent of the countries monitored by the IMF (International Monetary Fund) are expected to perform better than Brazil in the 2020/2021 period.
According to the Economist Intelligence Unit, Brazil should be the economy most impacted by Covid-19 in a sample of 19 countries when comparing GDP projections for 2020 before and after the pandemic.
Source: Folhapress