Monday , April 19 2021

Economists now predict a recession for the second wave of Covid and slow vaccination economy

The worst moment of the pandemic in Brazil led to new restrictions, such as the closure of irrelevant businesses
Vs. Rovena Rosa / Agência Brasil

The worst moment of the pandemic in Brazil led to new restrictions, such as the closure of irrelevant businesses

ON the culmination of the second wave of the pandemic in Brazil
, with the number of deaths approaching 4,000 a day, shattering expectations for the economy this year. With the health crisis worsening and vaccination slowing, more and more economists are predicting a new recession in early 2021, with two consecutive quarters of the withdrawal of gross domestic product (GDP).

The economic reaction this year and in 2022 will not be enough for the country to recover from recession
Covid19. According to forecasts, the country may return to pre-crisis levels only in 2023.

“Given the evolution of the pandemic and the slow pace of vaccination, the country is more likely to go through a technical recession in the first half. Until the health crisis is resolved, it will not have a strong continuation,” Adriano Laureno, a senior economist at Prospectiva, told the newspaper. Consulting.

Carlos Kawall, director of ASA Investments, says the rise in the pandemic in March offset a good moment in January and February, even when end of ambulance
. It estimates GDP decline of 0.5% in the first quarter relative to the end of the year and another 2% in the second quarter.

The forecast is that it will BEGINNING
growth of 2.3% in 2021 and 1.5% in 2022. Thus, the combined result for two years will not compensate for the decline in GDP of 4.1% in 2020:

“There is no clear scenario for pandemic control
, there are delays in vaccines. Even in countries that vaccinate faster, such as Chile, the United Kingdom and the United States, it is estimated that the gap needs to be widened over time, ”says Kawall, recalling that they are among the most relevant emerging countries. Brazil
it is the only one to revise the 2021 enlargement downwards.

In recent weeks, Focus newsletter
, a weekly report published by the Central Bank with the participation of financial market agents, research has lowered expectations of GDP growth this year. After four consecutive declines, GDP is expected to be 3.18%.

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