With Isolation Through End-June, Brazil’s 2020 GDP Expected to Fall Six Percent
RIO DE JANEIRO, BRAZIL – According to Undersecretary Vladimir Kuhl Teles, for every two weeks of isolation, the GDP drops 0.70 percentage points, considering the direct loss of R$20 billion for each week.
Teles, the undersecretary for Macroeconomic Policy for the Ministry of Economy, said that if social isolation is maintained until the end of June, this year’s Gross Domestic Product (GDP) will drop by over six percent.
The base scenario, released on Wednesday in the MacroFiscal Bulletin of the Secretariat of Economic Policy (SPE), is for a drop of 4.7 percent in GDP, considering the impact on the long-term economic trajectory between five and six percent and the end of social isolation on May 31st.
Teles explained that the drop in GDP could reach 6.2 percent this year, considering the ten percent impact on the long-term trajectory and the end of the rebound in the second quarter of 2021, even if quarantine ends at the end of May.
The Secretary of Economic Policy for the Ministry of Economy, Adolfo Sachsida, also pointed out that the 4.7 percent decline would already be the highest in the historical series since 1900. “This in itself proves the stringency of what we are experiencing.”
Source: Estadão Conteúdo
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