For Brazil, economic life just began to return to normal last year, then the pandemic hit.  This makes it a rough decade for the economy.  Brazil’s economy peaked during the commodity boom in 2011 at US $2.6 trillion.  Since then, a series of adjustments to a world with lower commodity demand growth, especially from China, ensued.  After crashing to just $1.8 trillion in 2015, Brazil’s GDP reached just $1.9 trillion in 2019, which effectively meant no growth.  While 2020 started off well, with leverage to a turn in the global manufacturing cycle, once the pandemic hit, everything crashed.  Projection on Brazil’s GDP indicate shrinkage of more than 5% this year to a level close to that from 2009. 

While the economy will shrink this year, inflation will not.  The Brazilian Central Bank (BCB) printed large amounts of currency earlier this year to finance the government.  This stands little different from other countries around the world.  However, unlike the EU and US, where consumers saved significant sums, thus offsetting the monetary largesse and avoiding inflation, the Brazilian government and consumer spent the currency, injecting it into the economy.  This drove year-over-year inflation to ~20% in October.  And with the number of confirmed COVID cases in Brazil reaching 5.3 million and growing at 22,000+ per day, life likely will not get any easier over the near term.  The only apparent good news stands in Foreign Direct Investment (FDI).  FDI totaled over $50 billion over the past 12 months and remains positive, allowing Brazil to run a Current Account Surplus.  For 2020, there has been No Salsa Down Under.  And hopes of a better tomorrow will have to sustain the country until the pandemic goes away.

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