OECD lowers Brazil`s growth forecast for 2020 due to coronavirus

According to a report published by Valor Econômico, the Organization for Economic Cooperation and Development (OECD) was previously considering raising its growth projections for Brazil to around 2% for this year although this has now been reduced due to the coronavirus.

The growth forecast was looking more optimistic after Brazil`s economic activity in the third quarter of 2019 had been stronger than expected. However with the coronavirus crisis, the projection has been downgraded to 1.7% for this year and 1.8% for 2021. Despite this, the organization considers that Brazil “probably will not be one of the most affected by the impact of the coronavirus”.

Coronavirus causes FED to cut interest rates

Today (March 3rd) the US central bank held an extraordinary meeting in which it decided to reduce the country’s interest rates due to the economic risks related to the coronavirus. Interest rates were lowered by 0.5%  to between 1- 1.25% by a unanimous decision.

In a statement, the FED said the US economy`s fundamentals remain strong. However, coronavirus poses increased risks to economic activity. “In light of these risks and in support of meeting its goals of maximum employment and price stability, the Federal Open Market Committee decided today to reduce the target,” says the statement. The committee added that “it is closely monitoring developments and their implications for the economic outlook and will use its tools and act appropriately to support the economy”.

Sources: Valor Econômico and Agência Brasil

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