Brazil GDP declines in 2020; coronavirus halts recovery

Brazil’s economy recorded a 4.1% contraction last year, data showed on Wednesday. The drop, which came to be the sharpest in decades, could be attributed to the coronavirus crisis as a second wave of virus restricted the economy’s recovery seen at the end of 2020.

Data from statistics agency IBGE showed that Latin America’s largest economy advanced 3.2% in the fourth quarter. The reading came larger than the 2.8% forecast expected by analysts in a Reuters poll. GDP per capita, on the other hand, dropped 4.8%. 

While there was an expansion, it was likely halted by an increase in new COVID-19 cases. The full-year drop stood as the sharpest since IBGE started data monitoring in 1996. This concern also dampened this year’s economic outlook, with the World Bank and International Monetary Fund expecting 8% and 9.1% contraction respectively.