In the Conjuncture Letter, released today, in Rio de Janeiro, economists from the Research Institute economical Applied (Ipea) outlined three scenarios for the Gross Domestic Product (GDP), which is the sum of all goods and services produced in the country.
The tables consider the time of social isolation imposed by the new coronavirus pandemic and also the effectiveness of mitigating economic policies adopted in Brazil.
As the world is going through, with the crisis of the new coronavirus, Ipea was unable to make a specific projection as it has always done regarding the country's economic situation.
In any of the scenarios outlined, however, there will be a drop in GDP this year. “You already have, in addition to the internal impacts of practically stopping some sectors, a worsening of the world economy as a whole.
IPEA
Although we have a very strong impact on the economy around the world and this also has an impact on the Brazilian economy and recovery always takes some time. We are working with a quick recovery but, even so, there is a loss in services that are no longer being provided and this is a loss that cannot be recovered.
So, it already generates a loss of GDP”, commented the director of Ipea, in an interview with Agência Brasil.
Partial recovery José Ronaldo Souza Júnior highlighted that in the three GDP retraction scenarios for 2020, a partial recovery of the economy is considered in the third quarter, and continued in the fourth quarter.
“This is counting on a recovery of the economy in which economic policies to mitigate economic damage are successful in terms of employment, mass layoffs, etc,” he stressed.
Therefore, the drop in GDP in the second quarter is already compromised due to sectors that are partially or totally paralyzed, said the director of Ipea.
Minimize impacts
Although he considered it inevitable that there will be some increase in layoffs, he hopes that economic measures can minimize this impact. “But it is obvious that there must be some increase in unemployment, because there are sectors that are completely at a standstill and some adjustment ends up being necessary”.
He recalled, however, that in order to obtain funding with government subsidy, the company needs to commit to not sending anyone away. “This helps to minimize the impact.”
The Ipea director admitted that the institute is navigating in unknown terrain, because what is being seen is a world parade never seen before.
“Not even in times of war do we have news like this in the modern world. It's really something new; We have a hard time making predictions.”
In that case, he says he hopes that a treatment for covid-19 can be discovered as soon as possible. For because that would lead to having a return to normalcy as soon as possible. "Let's say that the most positive scenario would be this."
Restrictions
The discovery of a more efficient treatment for the disease would dispense. Thus being the restrictions of all social interaction and would allow you to go back to one more life. quickly. “It is an issue that depends more on medical studies than on economics”, observed Souza Júnior.
