Brazilian Economy Minister Paulo Guedes said that according to initial estimates, the country's economy would shrink 6% as a result of the recession 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%, of which 2% was to be the external shock and 4% due to internal slowing down, although the 2% external shock we anticipate will not be happening”, the minister told a video virtual hearing of the of the Lower House and Senate combined committee that is monitoring and following the COVID-19 situation.
Guedes 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, should offset 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,” Guedes argued.
The minister added that the “curse of being an economy excluded from global production chains has ended up being a blessing in the current scenario.”