202110.05
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New Round For Economic Stimulus In Brazil

After the decrease of last year

The urgency of discussions about recovering the Brazilian economy has increased lately, aiming for a constrained but possible recovery. In 2020, our economy contracted 4.05%, after a small expansion. The expectation in 2019 for a greater expansion within the next few years actually didn’t happen. Of course, that one of the major reasons for that was the measures necessary to at least try to contain the spread of the coronavirus. The largest economy in Latin America was struck by this unexpected wave and the fact that the GDP (Gross Domestic Product) decreased. This is because such an index is related to industries, and we also may consider that some sectors are more important in the Brazilian economy. Such as agribusiness and commodities from the Oil and Gas exploration or natural resources.

Will a full recovery be possible?

Well of course to predict that is not possible, the whole world is going through a process of economic recovery. And yes everything is still uncertain though predictions can be calculated. Expectations about the boosts and post-pandemic times are now almost a reality. But partially, the population has been almost fully vaccinated, more dosages are coming. It is a scenario that mixes reality with the desire to put things back to normal. There are points that need to be considered, let us check some of them:

  • Economic recovery will take time, and also the possibility of diminishing the number of cases of covid-19 after variants appeared.
  • The growth will be slow but possible so efforts on the side of the Brazilian Government are necessary for that.
  • The possibility of growth will depend on the combined efforts of civil society and governments.

According to economists in research for Bloomberg

Adriana Dupita, a Latin American economist explains their view about the economical possibility in 2021.

The forces that drove the recovery seem waning. Cash handouts have not yet been resumed, the BCB is mulling a rate hike, and the vaccination roll-out has been so far too slow to tame a second pandemic wave. These factors bode poorly for growth in early 2021.

But in Brazil, there is also another important point that needs to be considered. The Brazilian economic team has little material to form a concrete plan that will actually work out. This is because there is a budget, after the spendings to contain the population encouraging them to stay at home.

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There are doubts about the future, mostly related to how much will we be able to recover and then grow.

The Brazilian service sector was the one that suffered the most

Certainly because of the situation that has been going on after 2019, and during the whole year of 2020. We must remember that during the year 2020 a huge part of the Brazilian population was not even expecting to get vaccinated. Now the vaccination of the population might increase the expectations for a better Holliday Season. But certainly, the expectation for the better is related to the increasing percentage of people getting vaccinated in Brazil. So, many are hoping things will go back to normal quickly, but the estimates are that the changes will really be felt after 2022.

Conclusion

In this article, we are discussing the latest topics related to the Brazilian economic situation. The expectations are targeting 2022 as the year that will actually show a hopeful change for the sake o economic recovery. Many people are getting vaccinated and the Governmental Programmes are also reaching more people. Did you like our latest post? Don’t forget to follow us on our LinkedIn page for more incredible news about the Brazilian economy and the World.

References

BLOOMBERG.COM. Brazil Economy Sputters With Stimulus Details Up in the Air. Available at: <https://www.bloomberg.com/news/articles/2021-02-12/brazil-economy-sputters-with-stimulus-details-up-in-the-air>.