Outlook of the aftermarket business recovery in Brazil - GiPA

Description

The Brazilian recovery speed from the Covid-19 crisis surprises specialists and poses the question: is it sustainable or shall we expect a relapse? What about the aftermarket? Since the beginning of the crisis, economists are continuously revising their forecast for the 2020 Brazilian PIB upwards. The latest projection from the Central Bank is 5% drop while the estimate was -6.5% in June and between -7 and -9% in April. This is 0.8 points over the FMI’s forecast (-5.8%) and 0.3 points under the Ministry of Economy’s projection. “Thought they were the epicentre of the coronavirus, Brazil surprisingly leads economic recovery in Latin America. However, three variables might abruptly stump this recovery…” The first one is the pandemic itself: even though the virus has stabilised in recent months, alarmingly high new Covid-19 cases mean that the virus could quickly expand, causing further disastrous consequences on the economy. How the virus evolves is still not clear, creating an uncertainty for the prospects of continued recovery. The two other variables are purely economic. One of the most mentioned factors to explain the quick recovery are the temporary stimulus measures taken by the government, such as the emergency aid paid to the Brazilian