June 24, 2020 / 8:13 PM / 16 days ago

Brazil economy 'nowhere near' as bad as some think, official says

BRASILIA, June 24 (Reuters) - Brazil’s economic decline this year will be “nowhere near” as bad as some forecasters think, a senior Economy Ministry official said on Wednesday, after the International Monetary Fund said it now sees a 9.1% contraction in the country’s economy.

Economic policy secretary Adolfo Sachsida said economic data has been improving in recent months, so much so that some of the gloomier forecasts of a 7% crash in gross domestic product, or more, will have to be revised up.

“The data that I have access to today indicates that May came in much better than April, June came in much better than May,” Sachsida said in a live online debate hosted by Arko Advice.

The Economy Ministry’s official forecast is still for a 4.7% decline in GDP this year, which would be the steepest since records began in 1900, due to the collapse in activity resulting from social isolation measures to combat the coronavirus.

Sachsida said the ministry’s estimate was based on the economy’s reopening in June. This has not happened, so the government may have to review that projection by a “reasonable” degree.

“This year is going to be a difficult year, but not nearly as difficult as some have thought,” said Sachsida.

Treasury Secretary Mansueto Almeida said on Wednesday that the economy could shrink by around 6-7% this year.

Sachsida also said that emergency payments for low-paid workers will be extended into July, one month beyond the original three months planned, although the value has yet to be determined.

Lower house president Rodrigo Maia has called for extra payments to be maintained at 600 reais ($114) a month, but government officials have said that would cost too much. (Reporting by Gabriel Ponte; Writing by Jamie McGeever; Editing by Leslie Adler)

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