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LatinNews Daily - 23 March 2021

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In brief: Resurgent pandemic threatens Brazil’s economic outlook

* The Confederação Nacional da Indústria (CNI), a Brazilian business lobby, has published its latest economic report, which highlights that the “second wave” of the coronavirus (Covid-19) pandemic in the country has negatively impacted economic expectations for the year, and warns that 2021 will be another difficult year for the economy (GDP shrank by 4.1% in 2020). In its baseline scenario, the CNI expects Brazil’s GDP to grow 3% this year (in line with the government forecast of 3.2%), but its pessimistic scenario forecasts just 0.6% growth, with an 11.8% contraction in economic activity in March-April due to isolation measures to combat the pandemic, and a recovery which begins in late May. The CNI’s optimistic scenario forecasts 4.5% growth. The CNI also warns of high unemployment, forecast to reach 14.6%, and of inflationary pressures. According to the CNI’s chief economist, Renato da Fonseca, the effects of the worsening Covid-19 crisis make structural economic reforms – notably tax reform – all the more necessary.