Economists now predict recession for second wave of Covid and slow vaccination | Economy

Economists now predict recession for second wave of Covid and slow vaccination | Economy
Economists now predict recession for second wave of Covid and slow vaccination | Economy
Rovena Rosa / Agência Brasil
The worst moment of the pandemic in Brazil has led to new restrictions, such as the closing of non-essential trades

O peak of the second wave of the pandemic in Brazil
, with deaths approaching 4,000 a day, brings down expectations for the economy this year. With the worsening of the health crisis and the slow vaccination, more economists are predicting a new recession in the beginning of 2021, with two consecutive quarters of retreat of the Gross Domestic Product (GDP).

The economic reaction this year and in 2022 will not be enough for the country to recover from the recession
Covid-19. Only in 2023, the country can return to pre-crisis levels, according to forecasts.

“Given the evolution of the pandemic and the slow pace of vaccination, it is more likely that the country will go through a technical recession in the first half. As long as the health crisis is not resolved, it will not have a robust resumption,” he tells the newspaper O GLOBO Adriano Laureno, senior economist at Prospectiva Consultoria.

Carlos Kawall, director of ASA Investments, says that the resurgence of the pandemic in March canceled out the good moment of January and February, even with the end of emergency aid
. He estimates a 0.5% drop in GDP in the first quarter compared to the end of the year and another 2% drop in the second quarter.

The forecast is that the START
grow 2.3% in 2021 and 1.5% in 2022. The combined result for the two years, therefore, will not compensate for the 4.1% drop in GDP in 2020:

“There is no clear scenario for pandemic control
, there are delays in vaccines. Even in countries that are vaccinating faster, such as Chile, the United Kingdom and the USA, it is estimated that it is necessary to widen the distance for a longer time “, says Kawall, remembering that among the most relevant emerging countries, the Brazil
it is the only one to have the 2021 expansion revised downwards.

In recent weeks, the Focus Bulletin
, a weekly report released by the Central Bank with the participation of financial market agents, the surveys have reduced the expectation of an increase in GDP this year. After four consecutive declines, a GDP of 3.18% is expected.

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