Brazil economy shrinks by 4.1%, beating gloomier outlooks

Brazil’s economy shrank last year by 4.1 percent amid the pandemic, data showed on Wednesday, the worst drop in decades, but not as much as originally expected due to cash transfers to the poor, the Al-Jazeera English website has reported.

Latin America’s largest economy grew by 3.2 percent in the fourth quarter, according to official statistics agency IBGE, more than the 2.8 percent median estimate in a Reuters poll of economists.

Among the gloomiest forecasts at the onset of the pandemic, the World Bank and International Monetary Fund estimated that Brazil’s 2020 GDP would shrink by 8 percent and 9.1 percent, respectively.

During the course of the year, however, only Brazilian agriculture showed positive growth, up 2 percent from 2019. Services and household consumption fell 4.5 percent and 5.5 percent, respectively, due to COVID-19 and restrictions to combat its spread.

KI/PR