Brazil’s economy experienced a 4.1% decrease in 2020
According to data released last week, Brazil’s economy experienced a 4.1% decrease in 2020, which is the lowest drop it has experienced in years. The decrease was mitigated by the inflow of cash to poor Brazilians through coronavirus stimulus packages.
Brazil experienced a 3.2% growth in Q4 of 2020. According to Brazil’s president, Jair Bolsonaro, Brazil was able to beat the expectations of analysts and economists because of the programs and efforts developed by his government.
Brazil’s growth was higher than the percentage estimated by economists
Brazil’s economy was estimated by economists and analysts worldwide to grow by only 2.8%. The country’s increasing coronavirus infections threaten the growth witnessed by the country in the last quarter.
Its 2020 growth is the worst witnessed by the South American country since 1996. 2020 also has one of the worst GDP on record according to data from the country’s central bank.
At the beginning of the coronavirus pandemic, the World Bank predicted that Brazil’s GDP would fall by 8%. The International Monetary Fund on the other hand predicted a 9.1% decrease.
Brazil experienced growth mainly in its services sector
Brazil’s growth was heavily influenced by its services sector. According to data from the IBGE, 2.7% of Brazil’s growth came from services. 3.4% from the increase in household spending, and 20% from foreign investment.
Alexandre Almeida, an economist based in Brazil, said the country experienced a huge decrease in activity in 2020, which has increased the fragility of public funds. He added that the emergency funds provided by the government reduced the effect of the coronavirus on the economy a little.
The total amount provided by the government in its stimulus package was %56.6 billion, which increased the country’s GDP by 4.5%. IBGE figures show that brazils economic activity is still lower than the amount recorded in previous years.