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Itaú worsens projection for Brazil and puts dollar at R $ 4.60 and negative GDP in 2020

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A special report on macroeconomic perspectives released this Wednesday (25th) by Banco Itaú brings a darker scenario as a result of the impact of the coronavirus. The main effect is a drop of 1.8% to -0.7% in the projection of the Gross Domestic Product (GDP) of Brazil.

For 2021, the projection was raised from 3% to 5.5%. The bank's latest report with projections for 2020 was released in early March. There was a big change in a short period of time.

The bank is also betting on a worsening exchange rate. The last dollar projection at R $ 4.15 was increased to R $ 4.60. The projection for 2021 remains at R $ 4.15.

Primary deficit estimates of 1.1% went to 3.1% of GDP in 2020, and from 0.6% to 0.8% of GDP in 2021.

The inflation projection decreased from 3.3% to 2.9% this year and from 3.5% to 3.3% in 2021.

For Itaú, the Selic rate will increase from the current 3.25% p.a. at the end of 2020 and to 3.75% a.a. at the end of 2021.

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