A team of macroeconomists in Bank Safra made a study about possible scenarios of recovery
The measurements were elaborated considering a possible recovery process on 2021.The estimatives also considered several risks that might arise during this process. This discovery is indicative of the strength of the Brazilian economy, even after the crisis with covid-19. There has also been issues related to wildfires and international aspects that Brazil never had before. And now we are almost in the end of 2020, after a decline of the economy in the whole world, we are trying to recover. Most part of this recovery, according to the team of specialists, is due to the evolution of Brazilian institutions during the last 20 years and also to the accumulation of international reserves.
The Country had worst economical issues in the past
The international role that Brazil is currently playing has some weight to this result. It is because the Country is already seen as one of the most profitable in the World, in terms of natural resources, probably the richer in terms of raw material. The importance of nature derivative products and the agrobusiness which has become very important specially during this time of lockdowns. Because the population all over the world is realizing how important essential goods are for the sustenance of families, specially during times of such trouble as we are in currently. Many Brazilians remember the situation of the Brazilian Economy during the 80s, and the inflation that was a part of the daily lives of citizens.
The reduction of the pandemic situation will improve even more such tendency
The current pandemic certainly had a negative impact over this recovery so far. But the production of a vaccine or even the diminishing of the number of cases because of many people being immune is a necessity now. It will be a gradual process of recovery but totally possible. The process of recovery might not be immediate, but it will involve actions that definitely consider informal businesses which were the most affected by the lockdown measures. People are still working on adaptations and ways of doing business with social distancing measures. And this might be a good opportunity for Brazil, actually the exportation of products such as meat and coming from the farming industry increased during the last few Months.
Projections for the recovery during 2021
In order for Brazil to recover during the course of 2021, according to specialists, the exchange rate should continue keeping the dollar prices between 5.35 and 5.45 Brazilian reais. The inflation will also increase to 3.5% because of the high demand for the exportation of food and climate issues. Besides that, the expectation for the creation of new positions in the labour market will have an impact in the increase of prices during 2021 too. But we will only be able to define and check the real economic impact of 2020 after we are able to deal with covid-19 and its consequences to businesses.
In this article we were talking about the current situation of the Brazilian economy. We are also discussing the possibilities of recovery after the 2020 recession caused by the pandemic situation. Anything is possible right now, but our Economy remained one of the strongest in the world and so far has been able to adapt to this new reality. Did you like our latest topic? Don’t forget to follow us on our LinkedIn official page and check all about the latest international economic topics about Brazil and abroad!
VALOR.GLOBO.COM. Recuperação econômica: veja projeções de PIB, dólar, inflação e Selic em 2021, Available at: <https://valor.globo.com/patrocinado/investe-safra/noticia/2020/11/25/recuperacao-economica-veja-projecoes-de-pib-dolar-inflacao-e-selic-em-2021.ghtml>.
REUTERS.COM. Brazil government keeps 2020 GDP forecast at a record 4.7% fall. Available at: <https://www.reuters.com/article/us-brazil-economy-govt-outlook-idUSKBN2662DL>.