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Brazil will lose R$1 trillion with the pandemic, says Unctad

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The pandemic will result in a loss of $178.1 billion to Brazil by the end of 2021, according the United Nations Conference on Trade and Development, Unctad.

The projection is for a loss of $102.2 billion in 2020 and $75.9 billion in 2021 (values adjusted at 2015 prices and exchange rate). In Unctad's scenario, at the end of 2021 the Brazilian Gross Domestic Product (GDP) will be almost 10% lower compared to the pre-pandemic expansion trend. There was a net drop in income in practically all countries.

In a report on the world economy, the UN agency predicts that global growth could reach 4.7% in 2021, driven by the strong recovery in the US, where the fast pace of vaccination and the new stimulus package of $1.9 trillion will boost consumption.

Still, the world economy will be $10 trillion smaller than before the pandemic. The widespread reluctance to attack the problems of inequality, indebtedness and insufficient investments, all aggravated by the pandemic, will lead to an unbalanced economic recovery, vulnerable to new shocks. Economic insecurity will become the new normal for many countries.

In its analysis, Unctad points out that the 'positive surprises' were Brazil, Turkey and the US, with relief packages that mitigated the recession. Unctad's Director of Globalization and Development Strategies, Richard Kozul-Wright, notes that "the slowdown in 2020 in Brazil was not as bad as expected thanks to a large fiscal stimulus and monetary accommodation, aided and stimulated by access to swap lines of the American Federal Reserve and a favorable turn in commodity prices in the second half of the year".

For 2021, the country is expected to see a return to positive growth, "but with the pandemic still raging, signs of monetary tightening and austerity hawks hovering as public debt to GDP rises...

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