Emergency aid is insufficient to improve economic outlook
The return of the emergency aid aimed at informal workers, in smaller amount and duration, is likely to mitigate the slowdown in activity in the first half of the year, but is insufficient to improve the scenario for 2021, the Fundação Getulio Vargas's Brazilian Institute of Economics (Ibre-FGV) says.
The institute now expects a new round of government policies for income compensation but maintained the estimate of 3.6% growth for the GDP on average for the year, with the recovery concentrated in the second half.
In the February edition of its Macro Bulletin, Ibre/FGV says that heterogeneity among countries, semesters and sectors will be a strong feature of the world economy evolution in 2021. While Asian nations, which suffered less from the pandemic, and the United States and United Kingdom, with more advanced vaccination campaigns, should drive the global GDP growth, Latin American emerging countries are likely to continue with a relatively weak performance.
For the Ibre/FGV team, emerging countries, especially Latin American ones, should only reach the current level of vaccination seen in the United States, where about 17% of the population have already received at least the first shot, by the middle of the second half.
"This, of course, increases the risks associated with new variants of the coronavirus and, therefore, the uncertainty about the pace of recovery and fiscal health in these countries," Armando Castelar, coordinator of Applied Economics at Ibre/FGV, and Silvia Matos, technical coordinator of the bulletin, say in the document.
In Brazil, point out Mr. Castelar and Ms. Matos, the pace of inoculation has been very slow: until the third week of this month, around six million doses of vaccine had...
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