Brazil Economic Outlook. First quarter of 2020

Brazil: reinforced recovery prospects.

Key points

• Key points:
• The Brazilian economy will continue to recover gradually in the coming years. After having grown around 1.1% in 2019, GDP is expected to expand 1.9% in 2020 and 2.0% in 2021, when it will finally reach the level exhibited before the severe crisis of 2015-16.
• The improvement of the global environment, the expansionary monetary policy in a context of inflation under control, the gradual increase in confidence, the reduction of the fiscal risk allowed by the recent approval of the social security reform, among other factors, will allow the growth pace to increase somewhat in the biennium 2020-21.
• In order for Brazil to grow significantly above 2%, it is essential to implement structural reforms that increase productivity. Although there are signs that the current government intends to do so, there are many obstacles to finally making progress in this direction, such as political polarization and concerns about sparking social protests.

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