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OECD improves outlook for world economy and Brazil in 2020

09/16/2020 | 12h43
OECD improves outlook for world economy and Brazil in 2020
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The global economy appears to be recovering from the thump caused by the new coronavirus faster than imagined just a few months ago thanks to the improved outlook for China and the United States, the Organization for Economic Cooperation and Development (OECD) said on Wednesday. (16).


For the organization, the outlook for Brazil in 2020 also improved, according to its new projections.


The world economy is on track to contract 4.5% this year, the OECD said. The estimate, unprecedented in recent history, represents an improvement over the 6% drop projected in June.


As long as the virus is prevented from spreading out of control, the global economy will grow again next year with a 5% expansion, compared to a 5.2% increase in June, according to the OECD.


However, a stronger resumption of the virus or stricter measures to contain it could cut 2-3 percentage points from the projection for 2021, warned the OECD.


The organization explained that it made its estimates under the assumption that local outbreaks will continue and that there will be local actions instead of national outages. They also assume that a vaccine will not be widely available until the end of next year.


The OECD said that actions by governments and central banks to support household and business incomes helped to prevent worse contractions and should therefore be maintained.


The better outlook for this year masks large differences between the major economies, with the United States, China and Europe expected to perform better than expected while India, Mexico and South Africa may do worse while struggling to contain the virus.


Having been the first country to experience the outbreak and after acting quickly to control the spread, China should be the only country in the G20 with economic powers to register growth this year, up 1.8%, against the forecast in June 2.6% contraction.


In turn, the US economy, which is the largest in the world, should also perform better this year with a contraction of 3.8%, against the 7.3% drop previously projected.


For Brazil, the OECD projected a 6.5% contraction in 2020, 0.9 percentage points more than in the June estimate, forecasting that the country will grow 3.6% in 2021, a worsening of 0.6 points.

Font: T&B Petroleum/Agência Brasil
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