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GDP Expected Ratings Aim Towards Growth On The Third Quarter of 2020

Growth has returned to the Brazilian Economy

The Economy has officially gone out of the so called “technical recession” on the Third Quarter of 2020. Even in the midst of a critical situation of social distancing. And this is partially because of the Emergency Aid that has provided for many families in Brazil during quarantine times preventing a greater recession. But now the data is Officially released by the Central Bank of Brazil, last Friday (11/13/2020). The Economical Activity Index by the same institution has registered a growth of 9.47%, in comparison to the previous Months of the current year.

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The GDP implies in the sum of all goods and services in a Country. So the index can be considered a reliable measurement for indicating Economical growth.


GDP of the two previous quarters has been overcome

According to the Brazilian Institute of Geography and Statistics (IBGE) the actual results will only be released by December. This year the results of the IBC-Br will reflect the effects of the current coronavirus pandemic, so the numbers are comparing the growth in relation to the previous Months of the year. Independently of the fact that this is a relative consideration and that we had in act a very serious reduction of the Economy, specially in sectors that depended on human presence and interaction. Travelling, for example, is very controlled and a person that wishes to get out of certain places are required to get tested and prove that he/she is healthy or covid-19 free. In this way, in case the person is infected, it will not be possible to pass the virus to other people during the trip or on other cities.

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We were expecting a much more difficult year economically speaking in Brazil.


Two quarters of economical recession signify a technical recession which apparently is surpassed

The worst Months in the 2020 coronavirus crisis impact over the Economy seem to be over. We are not sure about it yet on the long term, apparently Europe is entering in a second and very strict quarantine. We are only sure about the results in this current quarter but considering the situation we are in a much better situation than other previous recessions in the past. According to the IBC-Br, the Month of September this year was already showing signs of recovery, the current Month (November) is the fifth one showing the signs of recovery in a sequence. Of course those are good news, specially comparing to what we were expecting when the pandemic was firstly announced; and everyone was very afraid of the unusual virus easily spread.

The Emergency Aid was considered responsible for our partial recovery

The fear of recession and the actual closing of important businesses like restaurants and Shopping Malls had a great part in the downfall of the Economy in the beginning of 2020. And if you consider that we were hoping for an important growth that was planned and expected since the previous year. We found out that it is not always possible for us to predict such events, even if this is remotely possible. We are never expecting something like that specially when the Economy was starting to flourish again after several other minor recession events. The future might not be predictable, but it is possible to take measures to contain recessions such as the Emergency Aid and many other online selling possibilities that made businesses stay functioning.

Conclusion

In this article we are talking about a possible recovery in the Brazilian economy in 2020. We are all hoping that a vaccine against covid-19 is rapidly made available for population. But in the meanwhile, we have to keep the social distancing and still continue to run our businesses. Did you like our post? Don’t forget to follow us on our LinkedIn page and check more interesting news about international topics.

References

G1.GLOBO.COM. ‘Prévia’ do PIB do BC aponta alta de 9,47% no terceiro trimestre e saída da recessão, Available at: <https://g1.globo.com/economia/noticia/2020/11/13/previa-do-pib-do-bc-aponta-alta-de-947percent-no-terceiro-trimestre-e-saida-da-recessao.ghtml?fbclid=IwAR2PQn-hrWjjkQuIrXlQqVgCkIMWVUBbb4U6reo_DwEfopr6sxriv_YnNGg>.

BLOOMBERG.COM. Virus at Million-Cases-a-Week Pace Poised to Temper U.S. Rebound. Available at: <https://www.bloomberg.com/graphics/recovery-tracker/>.