July 27, 2020 / 12:13 PM / 19 days ago

Brazil 2020 GDP outlook improves again to -5.8% - cenbank survey

BRASILIA, July 27 (Reuters) - The outlook for Brazil’s economy improved for the fourth week in a row, a central bank survey of economists showed on Monday, with signs of recovery from the worst of the crisis lifting some of the heavy gloom that had built up in recent months.

Brazil’s gross domestic product will shrink 5.8% this year, according to the central bank’s weekly ‘FOCUS’ survey of around 100 economists, compared with a GDP fall of 5.95% forecast last week and 6.5% a month ago.

That would still be the biggest annual downturn on record. But officials say improving retail, electricity consumption and industrial indicators as lockdown measures ease and businesses reopen show the recovery is underway.

Central bank President Roberto Campos Neto said last week the bank’s own -6.4% GDP call for this year is too pessimistic, and Economic Policy Secretary Adolfo Sachsida said the contraction will be closer to the government’s -4.7% forecast.

The latest ‘FOCUS’ survey also showed 2020 current account deficit projections narrowing for a fifth consecutive week, to $8.3 billion from $8.9 billion. The average forecast a month ago was for a $13.5 billion deficit, and almost $40 billion in May.

Economists maintained their year-end interest rate outlook at 2.00% for the fourth week in a row, the survey showed. The central bank is expected to lower its benchmark Selic rate by 25 basis points to a new low of 2.00% next month. (Reporting by Jamie McGeever Editing by Nick Zieminski)

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