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Brazil's economy to shrink 6.1 percent in 2020

Christian Fernsby ▼ | July 14, 2020
Brazilian financial analysts say the economy will contract less than they expected in 2020, adjusting their forecast from -6.5 to -6.1 percent, the Central Bank of Brazil said on Monday.
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According to the bank's weekly poll of leading financial institutions, analysts' growth forecast for 2021 remained steady at 3.5 percent.

Topics: Brazil

The estimation for 2020 reflects expectations that economic performance will improve in the second half of this year, following the pandemic's impact on productivity in the first half.

Their inflation forecast rose from 1.63 percent to 1.72 percent for this year and remained steady at 3 percent for next year. The government's official inflation target is 4 percent in 2020 and 3.75 percent in 2021, with a 1.5 percent margin higher or lower.

Analysts maintained their previous forecast for the benchmark interest rate at 2 percent by the end of this year and 3 percent by the end of the next.

A trade surplus of 54 billion U.S. dollars should be seen this year, rising to 55.25 billion U.S. dollars in 2021, analysts said.

Foreign direct investment in Brazil is forecast to reach 55 billion U.S. dollars in 2020 and 64.1 billion U.S. dollars in 2021.