Brazil will have the worst economic performance among the world’s ten largest economies, given the PPC (purchasing power parity) benchmark, which reflects differences in the cost of living between countries.
This is evidenced by a study conducted on request Leaf By economists Claudio Considera and Juliana Tres, of FGV Ibre (Getulio Vargas’ Brazilian Institute of Economics), based on data and forecasts from the International Monetary Fund (IMF) released in April.
If the size of the world’s economies is considered in terms of purchasing power parity, Brazil should retain the eighth place in 2021 for the third year in a row. In 2018, he was in seventh place.
In 2020, Brazil managed to reduce its distance from most of its predecessors, except for China and Indonesia, which have better economic performance.
In 2021, the seven largest economies on the planet will outperform Brazil, according to International Monetary Fund estimates, and are more optimistic than the Brazilian government.
The country should not lose places in the ranking this year, if the drop is confirmed, but it will be close to being overtaken by France and the United Kingdom, currently ranked ninth and tenth, which will also grow further in 2021.
The fund expects 3.7% growth for Brazil this year. Ministry of Economy 3.2%. The market is valued at 3.09%, according to a Fox Central Bank survey. The global average is an expansion of 6%, according to projections by the International Monetary Fund.
According to purchasing power standards, China is the largest economy in the world, followed by the USA, India, Japan, Germany, Russia, Indonesia and Brazil. The historical series of purchasing power ranking (PPC) was changed due to the upward revision of the Brazilian GDP of 2018 and 2019, which improved the country’s position on the list – in the beginning, Brazil was projected to fall in the ranking in these two years.
Last year, Brazil saw its GDP drop 4.1%, above the global average of 3.3%, and its currency depreciated by nearly 30%, one of the worst international offerings.
In 2021, the exchange rate should not depreciate as much. Last year, the real rose from R $ 4.03 to R $ 5.20. Market expectations point to a rate of R $ 5.40 at the end of this year.
“Even if the real value doesn’t drop that much this year, you will have less growth than in the rest of the world you are playing against, because we’re not taking care of the epidemic properly,” says Considera.
According to him, even if the country does have a “V” recovery, the government says, this year’s growth does not replace 2020 losses, and even if it does, the country will return to the very low growth level verified in 2017 to 2019.
Ibre is forecasting GDP variance close to zero in the first quarter, which may be repeated in April and May, with increased traction in the following three months and another slowdown beginning in September.
The second quarter will depend on your ability to vaccinate people, because the most important sector in the economy, services, depends on social interaction. Either the population has been vaccinated or there is no social interaction, says the economist at FGV Ibre.
In addition to the purchasing power benchmark, the fund also compares the size of the economies taking into account the value of each country’s gross domestic product (GDP) in dollars at current prices.
In this case, Brazil slipped from the ninth place it ranked in 2018 and 2019 to the 12th place in 2020, overtaken by Canada, South Korea and Russia. This decrease was actually predicted by a study by Ibre and published in November last year.
For 2021, IMF projections indicate that the country should lose another position, this time to Australia, according to calculations made by the two economists at FGV Ibre.
According to this criterion, the USA is the largest economy in the world, followed by China, Japan and Germany. Until 2014, before the recession began that year, Brazil was the seventh largest economy by this criterion.
IMF projections also show that Brazil slipped in the global ranking of countries with the highest per capita GDP in 2020, and should continue to lose their positions in the coming years. Brazil’s decline in the ranking has occurred since at least 1980, when the country was in the top 50. In 2020, it ranked 85th out of nearly 195 countries for which data are available.