Brazil’s economic recovery is at crunch time for meeting lofty quarterly growth expectations just as a sudden inflation spike adds to worries about the coronavirus pandemic’s devastation and unconvincing budget plans, a Reuters poll showed.
Growth in Latin America’s biggest economy looks on track for completing a V-shaped pickup in the second quarter, after a historic recession resulting from the first hit of COVID-19. Nevertheless, threats continue to mount.
Part of the recovery is due to President Jair Bolsonaro’s opposition to lockdowns, a decision many blame for why Brazil has become the world’s epicenter of the pandemic, with a healthcare system on the verge of collapse. read more
At the same time, the country is grappling with a jump in consumer prices led by a pass-through to domestic food costs of bullish global commodity markets. In response, the central bank has begun to frontload its planned policy normalization.