Brazilian Macroeconomic Overview – July edition 2

Recovery under way, but gradual and with many doubts and risks.

In most countries, the worst of the public health and economic crisis appears to be behind us.

Despite some localized outbreaks, as in the south of the United States, the number of new cases has stopped growing and the number of deaths has been falling, as hospital protocols have improved and new COVID-19 treatments have been identified. There has also been good news about the search for a vaccine, although one is unlikely to be available on a large scale this year, even in the best of scenarios.

The partial reopening of many businesses and the strength of extended fiscal and monetary stimuli in the world’s main economies have allowed for some recovery in economic activity, which on a global level has again surprised positively over the past few weeks. The May and June figures showed partial recoveries from the strong fall between February and April, and the trend is for the recovery to gain impetus in this quarter.

However, many doubts remain, especially about how things will unfold in the rest of this year and in 2021. In relation to the pandemic, there is always a risk of a second wave. Thus, even though the vast majority of developed nations have reached what appears to be the final stage of the epidemic cycle, some countries and some American states still face a battle to contain the virus, amid what appears to have been a premature normalization of the economy.

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