Brazil’s economy is set to shrink by 5.8 percent in 2020, the International Monetary Fund said Monday, revising up an earlier forecast but warning the country faced “excpetionally high” risks.
“The economy is projected to shrink by 5.8 percent in 2020, followed by a partial recovery to 2.8 percent in 2021,” the IMF said in its annual report on Latin America’s largest economy.
The report released Monday revised upwards the more pessimistic forecast of a 9.1 percent contraction in June.
It praised the right-wing government of President Jair Bolsonaro for its “swift and substantial” response to the economic crisis prompted by the coronavirus pandemic.
The government increased health spending, boosted financial support for state governments, extended state-backed credit lines and introduced employment retention schemes, which helped protect formal