BRASILIA, May 12 (Reuters) - Brazil’s government is expected to slash its 2020 economic outlook on Wednesday to a contraction of more than 4%, two sources with direct knowledge of the matter told Reuters.
One of the sources said the anticipated decline in gross domestic product could be around 4.5%. According to central bank data, that would mark the biggest annual fall in GDP in at least 50 years.
The government’s official outlook for this year is still for zero growth it announced in March, but Economy Ministry officials have since acknowledged that the coronavirus crisis will trigger a steep downturn.
The new GDP forecast will be released on Wednesday as part of the parameters that will be used as a reference for the updated public finances outlook in the Economy Ministry’s next bimonthly revenue and expenditure report due out by May 22.
The latest consensus in the central bank’s weekly “FOCUS” survey of around 100 economists is for a GDP contraction this year of 4.1%.
The International Monetary Fund’s forecast is for a 5.3% decline, while several investment banks have cut their outlooks in recent days, with Deutsche Bank, JP Morgan and Societe Generale now forecasting a GDP crash of 6.2%, 7.0% and 7.4%, respectively. (Reporting by Marcela Ayres in Brasilia Writing by Jamie McGeever Editing by Matthew Lewis)