International banks are predicting a contraction in Gross Domestic Product (GDP) of between 1.0% and 0.9%.
JPMorgan and Goldman Sachs banks project a contraction in the Brazilian economy this year, with GDP affected by the global effects of the coronavirus.
JPMorgan, the most conservative, forecasts a GDP decline of 1.0% in 2020 (compared to the previous expectation of 1.6% growth), with a "deep recession" expected in the first half of 2020.
The bank expects the economy to contract by 3.5% in the first quarter of this year, compared to the previous three months (seasonally adjusted), especially due to the blow to global GDP and Covid-19 fears in the country.
With coronavirus, banks project recession in the first half of the year and reduce GDP forecast for this year
In the second quarter, JPMorgan bank estimates a drop of 10%, as the downward effects of the spread of the coronavirus and measures to contain the outbreak, together with the tightening of financial conditions and a global recession, will play a “crucial role”.
"We believe the second quarter could be even worse, but the fiscal measures announced by authorities should soften the effects," the bank's report says.
Goldman Sachs also updated its projection for the economy in 2020, from expansion of 1.5% to contraction of 0.9%.
"The combination of declining external demand for goods and services, worsening terms of trade, a significant tightening of domestic financial conditions, and the economic impact of rapidly escalating measures to address the Covid-19 outbreak within national borders have led us to further downgrade our outlook for the economies of Latin America," Goldman said. Also in a report.
This Wednesday (18), UBS lowered its growth expectation for Brazilian GDP this year to 0.5%, after a rate already revised downwards to 1.3% (compared to 2.1% previously).