Day: March 19, 2020

JP Morgan projects a 1% GDP contraction in 2020

The banks JP Morgan and Goldman Sachs started to foresee a contraction of the Brazilian economy this year, with the GDP affected by the effects of the coronavirus. The most conservative is JPMorgan, which projects a 1.0% decline in GDP in 2020 (compared to previous expectations of 1.6% growth), with a “deep recession” in the first half.

Brazilian airlines will have a longer period to reimburse cash for tickets

The measures announced by the federal government to minimize the impact of the new coronavirus pandemic on Brazilian commercial aviation are positive, evaluates the president of the Brazilian Association of Airlines (ABEAR). Among the emergency measures announced are a longer period for airlines to reimburse cash for tickets, the postponement of airport fares and airport grants.

Brazilian Central Bank cut interest rate by 0.50

The Central Bank’s Copom (Monetary Policy Committee) at the basic interest rate (Selic) at 0.50 percentage point, from 4.25% to 3.75% per year. It is the lowest level since the beginning of the historical series, in 1996. The decision was unanimous. The Central Bank explains that the current situation calls for caution in the conduct of monetary policy and, therefore, sees the new Selic reduction as “adequate”. This was the sixth consecutive cut, the second announced this year, and comes amid concerns about the effects of coronavirus worldwide.

Odebrecht Closes Agreement for $10bn

The company was expected to update its judicial reorganization plan. The reorganization procedure is expected to be voted at a general meeting this month. Odebrecht, one of the main symbols of Operation Lava Jato, reached an agreement with its main creditor banks to restructure more than R$50 billion ($10 billion) in debt.

Coronavirus: companies may cut hours and wages by half

In addition to allowing the payment of taxes and contributions to be postponed, the government wants to allow companies affected by the coronavirus crisis to temporarily cut half the workday and workers’ wages. According to the Ministry of Economy, the measure is important to avoid layoffs and job losses caused by the fall in economic activity. The negotiation will be individual.