International banks are forecasting a retraction of the Gross Domestic Product (GDP) between 1.0% and 0.9%.
Banks JPMorgan and Goldman Sachs project the contraction of the Brazilian economy this year, with GDP affected by the global effects of the coronavirus.
JPMorgan, the most conservative, predicts a decline of 1.0% in GDP in 2020 (compared to the previous expectation of growth of 1.6%). With a “deep recession” in the first half of 2020.
The bank expects a 3.5% contraction of the economy in the first quarter of this year, compared to the previous three months (seasonally adjusted), mainly due to the blow to global GDP and fears of Covid-19 in the country.
With coronavirus, banks project recession in the 1st half and reduce forecast for this year's GDP
In the second quarter, JPMorgan bank calculates a drop of 10%, as the downside effects of the spread of the coronavirus and measures to contain the outbreak, together with tightening financial conditions and a global recession, will play a “crucial role”.
“We believe that the second quarter could be even worse, but the fiscal measures announced by authorities should soften the effects”, says the bank's report.
Goldman Sachs also updated its forecast for the economy in 2020, from 1.5% expansion to 0.9% contraction.
“The combination of declining external demand for goods and services. Worse terms of trade. Significant tightening of domestic financial conditions. And the economic impact of rapidly escalating measures to deal with the Covid-19 outbreak within national borders has caused us to further revise our outlook for the economies downwards” (from Latin America), Goldman said. Also in report.
This Wednesday (18), UBS lowered its growth expectation for the Brazilian GDP this year to 0.5%, after a rate already revised downwards to 1.3% (against 2.1% before).
