25% rise in exports to China helps soften the coronavirus pandemic’s impact on Brazil’s economy

Economy Minister Paulo Guedes said that according to initial estimates, the Brazilian economy would shrink 6% as a result of the crisis caused by the new coronavirus pandemic, but now, thanks to the increase in exports to China, expectations are of a retraction of only 4% this year.

“Brazil was going to fall 6%, 2% being the external shock and 4% due to internal slowing down, although the 2% external shock is not happening”, said the minister in a virtual hearing of the mixed committee of the Chamber and Senate that accompanies the Covid-19 crisis. He did stress, however, that the estimate is precarious because the extent or depth of the health crisis is not known.

According to Guedes, a 25% increase in exports to China, is offsetting the reduction of more than 30% in foreign sales to the United States and Argentina. “As China accounts for a greater volume of exports today than the United States, Argentina, and the European Union put together, Brazilian exports are unchanged. They have risen a lot in agribusiness, they have fallen a little in manufactured goods, but the external impact, as I predicted, purely from the point of view of external shock, is not having great consequences for now, ”said Guedes. He added that the “curse of being an economy excluded from global production chains has ended up being a blessing in the current scenario.”

Source: Reuters

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