Brazil’s Economy Likely Contracted in First Quarter on Virus

(Bloomberg) -- Brazil’s economy likely contracted in the first quarter as the onset of the coronavirus pandemic sparked declines from industrial output to services, according to the central bank’s main measure of activity.

The economic activity index, which is a proxy for gross domestic product, fell 1.95% in the January-March period compared to the previous three months, according to a central bank report published on Friday. In March, the index tumbled 5.90% from the month prior, less than the median forecast for a 5.95% plunge from analysts in a Bloomberg survey.

Latin America’s largest economy is collapsing under the effects of the coronavirus, which has sickened over 200,000 people locally, hurt confidence and forced stores and factories to close. Growth prospects are being further undercut by political tensions, including accusations of criminal wrongdoing against President Jair Bolsonaro. This week, the Economy Ministry warned growth may fall over 6% this year if social isolation measures are upheld.

Read more: Brazil Cuts Growth Forecast Ahead of Economic Bloodbath

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