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With a billion-dollar economic stimulus package and erratic government action to combat the pandemic, Brazil ended the year in an intermediate position in the 2020 economic performance rankings.
Brazil’s GDP fell 4.1% in 2020 and grew 3.2% in the last quarter of 2020.
According to data collected by the OECD (Organization for Economic Cooperation and Development), only China closed the year with a growth of 2.3%, among the countries that have already released their GDP (Gross Domestic Product) for 2020.
Despite the positive data, showing a real return to the pre-crisis level, Chinese growth is the lowest since 1976, when there was a contraction of almost the same magnitude.
Some other Asian and Nordic countries, such as South Korea, Indonesia, Norway and Sweden, which suffered relatively less from the pandemic, had negative results, but with better results than Brazil.
The US, with a retraction of 3.5%, stands out among the large developed economies. In the middle of last year, the projections pointed to a negative result of almost 7%. Japan recorded a 4.8% drop.
Among the worst results, three major European economies stand out: France (-8.2%), United Kingdom (-9.9%) and Spain (-11%). Germany, the European country that adopted the largest volume of stimulus to the economy, contracted by 5%.
Other emerging countries, such as Russia, India, South Africa, Turkey, Australia and Argentina, have not yet released their results for the year.
According to the Macro Ibre Bulletin (FGV’s Brazilian Institute of Economics) for February, the vaccination rate has become the main determinant of how much and when economies will recover this year. The UK and US, which are moving faster, will drive global growth, while emerging Latin American countries are expected to remain relatively weak.
The IMF (International Monetary Fund) projections for 2021 are a growth of 3.6% for Brazil, 4.2% for the countries of the Euro Zone, 5.1% for the United States and 8.1% for China .
Stimulus package
Brazil’s stimulus package to tackle the pandemic was one of the largest in the world, a factor that helped prevent a further contraction in the economy last year.
The country announced measures equivalent to 12% of GDP (Gross Domestic Product), according to data from the team responsible for the Covid-19 Economic Stimulus Index, from Columbia (USA), Sungkyunkwan (South Korea) and Eskişehir Osmangazi ( Turkey). .
With that, it ranked 27th out of 168 nations. Compared to GDP, spending is close to that observed in countries such as Australia, exceeds all BRICS (a group made up of Brazil, Russia, India, China and South Africa) and all the relevant Latin American countries (Chile spends 10%) . It is also just two percentage points below that of the US.
The Brazilian package includes, among other measures, emergency aid for informal workers, the job retention program, health resources, transfers to states and municipalities, and credit guarantee for business loans. Measures are also taken to ensure a greater supply of credit in the financial system that has no impact on public accounts.
