Covid-19 crashes the Brazilian economy; recession is declared

The fall occurred at the height of social isolation and business closures. Due to the effects of the coronavirus pandemic, Brazil entered a recession.

BRAZILIA (Agencies) – In the second quarter of the year, Latin America’s largest economy reported a 9.7 percent contraction from the first quarter of the year, when it fell 2.5 percent.

The South American country is the most affected by the coronavirus, while President Jair Bolsonaro has minimized the virus’s severity by prioritizing economic activity.

However, compared to the second quarter of 2019, the collapse was 11.4 percent.

In this context, the Minister of Economic, Paulo Guedes, predicted a V-shaped recovery for the national economy, with an abrupt fall, but with an increase in the short term.

The sectors that suffered the most significant impact from the second quarter contraction were industry, with a fall of -12.3 percent, and services with -9.7 percent, representing 95 percent of the national gross domestic product.

The second quarter’s contraction occurred “in the height of social isolation when various economic activities were partially or paralyzed to face the pandemic,” explained Rebeca Palis, coordinator of National Accounts of the Brazilian Institute of Geography and Statistics (IBGE).

In this scenario, yesterday, Bolsonaro announced that it would maintain the emergency payment program to help low-income citizens until the end of the year.

The aid, which began last April, had previously been set at 600 reais ($111) and cost the Treasury 50 billion reais each month. So from now on, the support will be 300 reais.

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