World Bank sees growth flagging in Bolsonaro's 'broke' Brazil

Brazil's economy is likely to grow 3% in 2021 and less next year, the World Bank said on Tuesday, as stimulus fades and the country struggles to recover output lost in the pandemic. The World Bank's forecast for Brazil's 2021 gross domestic product (GDP) is 0.8 percentage point higher than its June estimate, but not enough to offset a likely 4.5% drop in 2020 amid the world's worst COVID-19 death toll outside the United States.

Brazil's economy is likely to grow 3% in 2021 and less next year, the World Bank said on Tuesday, as stimulus fades and the country struggles to recover output lost in the pandemic.

The World Bank's forecast for Brazil's 2021 gross domestic product (GDP) is 0.8 percentage point higher than its June estimate, but not enough to offset a likely 4.5% drop in 2020 amid the world's worst COVID-19 death toll outside the United States. Pressed by supporters outside the presidential palace on Tuesday asking for economic relief, Bolsonaro scowled.

"Brazil is broke, boss," he said. "I can't do anything." The president has been widely criticized for dismissing the dangers of the coronavirus and is now facing questions over delays to Brazil's vaccine rollout. Nearly 200,000 Brazilians have died from COVID-19, yet a national immunization program is still at least three weeks away, even as inoculations have already begun in regional peers Chile, Mexico and Argentina.

Nonetheless, Bolsonaro's support has held up well during the crisis, polls show, due in part to a stimulus package of roughly 400 billion reais ($76 billion), including some 275 billion reais in cash transfers that saved millions from poverty. As those programs wind down, World Bank economists forecast an "uneven" recovery, with concerns about travel and restaurants hurting services, while industry and agriculture lead growth.

"The momentum (of recovery) is expected to decrease as the year progresses, partly due to the withdrawal of monetary and fiscal stimuli, reducing growth to 2.5% in 2022," it said. ($1 = 5.2620 reais)

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