Bank says its dramatic downward revision due to severity of Covid-19 pandemic in Brazil
Central Bank of Brazil headquarters building in Brasília. Picture: 123RF/DIEGO GRANDI
In its quarterly inflation report, the central bank repeated its view from last week's policy meeting, when it cut interest rates by 75 basis points to a record low of 2.25%, that room for further policy stimulus was small. "The level of uncertainty about the pace of economic recovery throughout the second half of this year remains higher than normal," it added.A gross domestic product slump of 6.4% is in line with market consensus and steeper than the government's -4.7% forecast. The International Monetary Fund on Wednesday slashed its 2020 GDP outlook to -9.1% from -5.3%.
In four scenarios outlined the report, 2020 projections varied from 1.9% to 2.4%, and the range for next year was from 3% to 3.2%.
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