RIO DE JANEIRO: Brazil's economy, the biggest in Latin America, contracted by a record 9.7 percent in the second quarter of 2020, plunging into recession as coronavirus lockdowns hit home, the official statistics agency said Tuesday.
The drop was larger than economists had forecast by about half a percentage point. But it was smaller than feared at the height of the economic shut-down, and also smaller than the contractions in many other countries hit hard by the virus, including Britain, France, Spain, Mexico and Chile.
The question now is what the rest of the year has in store for Brazil, where the virus is still wreaking havoc and room is running out to continue the huge government stimulus spending that has softened the blow so far. "This was a record contraction, but that was expected.... What markets want to see now is how strong the recovery will be in the second half of the year," economist Victor Beyruti of consulting firm Guide Investimentos told AFP. Brazil has been hit hard by the pandemic, with the second-highest number of infections and deaths worldwide after the United States, and stay-at-home measures to contain the virus have taken a heavy toll.