Faced with the escalation of the coronavirus, Credit Suisse cut its projection for Brazil’s Gross Domestic Product (GDP) from 1.4% to zero in 2020. The bank’s base scenario now predicts a recession in the first half of 2020, with contractions of 0.1% in the first quarter (over the previous quarter) and 1.6% in the second quarter. Credit said it is assuming a projected recovery in economic activity in the second half of this year.
Estimates of Brazil’s grain exports this year have remained unchanged despite the turbulence suffered by global markets in the face of the rapid advance of the new coronavirus. Anec’s director general, Sérgio Mendes, said by telephone that the entity maintains the projection that Brazil will export 73 million to 74 million tons of soybeans this year, in addition to 34 million to 35 million tons of corn.
Gol airlines announced that it will reduce its total operating capacity by up to 70% by mid-June, due to global restrictions imposed by authorities as a result of the new coronavirus. The reduction in the international market will be between 90% and 95%, while in the domestic market it will be in the range of 50% to 60%.
The Ibovespa, the main index of the Brazilian stock exchange, closed at a high of 4.85%, at 74,617.24 points, after falling 14% the day before. The commercial dollar closed down 0.88%, sold at R$ 5.002. Dollar jumped 4.86%, to R$ 5.0467 on the sale, which was a new maximum record high for a close. To try to contain the dollar’s rise, the Central Bank offered $ 2 billion through line auctions. A similar measure had been taken on Friday, the first time that the BC has made a net money supply in this modality since December 18 of last year. Line auctions are usually held at times of punctual demand for liquidity.
The coronavirus pandemic led IBGE to postpone the completion of the Demographic Census that would begin in August. Part of the funds will be transferred to the Ministry of Health for actions to deal with the health crisis. The original plan foresaw expenses of R$ 3.4 billion ($ 680 million), but the president of IBGE determined a cut of 25% of the amount for the research that will be transferred by the Ministry of Health.