Brazil’s economic growth outlook higher than developed countries – OECD report

RIO DE JANEIRO, BRAZIL – A report from the Organization for Economic Cooperation and Development (OECD), released this month, with data from January, points out that at the start of the year Brazil posts economic growth prospects higher than the average of the 37 countries that make up the OECD and the G7 countries (Germany, Canada, USA, France, Italy, Japan, and the UK), which comprise the group of the world’s most industrialized countries.

According to the composite leading indicator (CLI), Brazil’s assessment in January 2021 reached 104.2, where 100 represents an average score assigned by the OECD for growth expansion.

The average indicator of OECD countries stood at 99.6, and of the G7 reached 99.5. The CLI is a measure used by the organization to capture the market’s perception of economies’ future growth capacity.

Growth

According to the OECD, Brazil maintained its positive performance from late last year and in January 2021, for the third consecutive month, posted a steady growth rate in relation to economic recovery, standing out among global economies.

The projection made for Brazil is the same as that attributed by the organization to two other emerging countries – China and India. The OECD points to stable growth in the USA, Japan and European countries such as Germany, France and Italy. Conversely, the UK presents a deceleration, according to the organization.

In January, the International Monetary Fund (IMF) improved its projection for Brazil’s growth in 2021. For this year, the IMF’s Global Economic Prospect report projects 3.6% growth for the Brazilian economy, 0.8 percentage points more than in the last edition of the report.

Covid-19

The fiscal impact of the measures adopted by the federal government to fight Covid-19 totaled R$620 billion by December 2020. According to the Ministry of Economy, the amounts contributed by the Brazilian government are higher than the average in advanced countries and include R$20 billion in extraordinary credit for the purchase of vaccines.

To mitigate the impact of the crisis, the Federal Government paid emergency aid to 67.8 million vulnerable Brazilians, provided 19,517 new ICU beds, distributed 345 million personal protective equipment (PPE) and 16,884 lung ventilators, and preserved 10.9 million jobs through the Emergency Program for the Maintenance of Employment and Income, among other measures.

A total of R$92 (US$17) billion was provided to support micro, small, and medium-sized companies through the BNDES’ Emergency Program for Access to Credit, and R$48 billion through the National Program to Support Micro and Small Companies (PRONAMPE).

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