MercoPress. South Atlantic News Agency

Brazilian central bank estimates economy will begin to recover in the fourth quarter

Campos Neto said the federal government will be expected to compensate states more than 100 billion reais (US$19.09bn) in tax revenue lost to lockdown policies

Brazil's central bank president Roberto Campos Neto said this weekend that Latin America's largest economy will begin to recover from the coronavirus crisis in the fourth quarter, according to an interview in local media.

Brazil has more coronavirus cases than any other country in Latin America. On Saturday, the health ministry said the number of confirmed cases rose by 2,917 to 36,599. Deaths rose by 206 to 2,347, the ministry said.

“I think the last quarter will show improvement,” he said in the interview with website Poder360, which has published a teaser but will publish the interview in full on Sunday.

“Now the question is the third quarter, to what extent will it be impacted.”

Brazilian President Jair Bolsonaro has repeatedly dismissed the severity of the coronavirus outbreak and criticized social isolation guidelines, arguing that the economic toll will kill more people than the virus.

On Saturday, he repeated this argument in Brasilia, meeting with a small crowd of protesters on the streets and broadcasting the encounter on Facebook Live.

He said that Brazil's federal government will be expected to compensate states more than 100 billion reais (US$19.09 billion) in tax revenue lost due to lockdown policies that have negatively affected the economy. But Bolsonaro said there is no room in the country's budget to afford those costs.

Campos Neto added that the central bank will issue a formal forecast for Brazil's economy soon, but that it could take some three more months to be able to formally assess the impact of the coronavirus crisis on the Brazilian economy.

“I think the last quarter will show improvement,” he said in the interview with website Poder360, which has published a teaser but will publish the interview in full on Sunday.

“Now the question is the third quarter, to what extent will it be impacted.”