Brazil's economic activity is growing again and exceeding the pre-epidemic level

Rio de Janeiro, September 15 (EFE). – Brazil’s economic activity grew by 0.60% in July compared to June, which witnessed four months of consecutive expansion, and is already at a higher level than it was before the start of the Covid epidemic, in February last year, the Central Bank reported this Wednesday.

The so-called index of economic activity (IBC-Br), which the monetary authority measures monthly in an attempt to predict the direction of the country’s GDP, reached 140.52 points in July, so it exceeded the level it was at. In February 2020 (139.16 points), when Brazil recorded its first case of coronavirus.

The 0.60% growth in economic activity in July practically doubled those expectations by economists for the month (0.35%) and showed the strong recovery of Latin America’s largest economy in 2021 after suffering a 4.1 percent decline in 2020, its worst result. Several years ago, it sank due to the economic effects of the epidemic.

According to the Central Bank, Brazil’s economic activity grew by 5.53% in July compared to the same month last year, when the country had already lifted part of the social distancing measures and overcame the worst economic moment of the epidemic.

The source added that economic activity grew by 9.44% in the last quarter (May-July) compared to the same period last year, and that it accumulated by 6.8% in the first seven months.

Thanks to this strong recovery, Brazil’s economic activity grew by 3.26% in the past twelve months to July compared to the period between August 2019 and July 2020, according to the indicator that Brazilian economists know as “ex-GDP”. .

The numbers are in line with the expectations of both the government and economists, who expect that Brazil will end 2021 with economic growth of about 5.15% after the historical decline last year (-4.1%) and that it will surpass the crisis caused by the epidemic. .

Despite optimistic forecasts for 2021, analysts in recent days have lowered their forecast for Brazil’s growth in 2022, which is now at less than 1%, due to the growing problems facing the country.

In addition to the serious institutional crisis one year before the 2022 presidential elections, Brazil is experiencing a sharp increase in inflation, which has already exceeded 8% annually, its highest level in several years, forcing the Central Bank to raise its powers. The basic interest rate.

Economists fear that more expensive money will slow the country’s economic expansion next year, as well as the effects of the serious water crisis facing the country, the largest in 91 years, given the possibility of Brazil experiencing blackouts or electricity rationing. EFE

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