Aerial view showing factories at the Manaus Duty Free Zone , Amazonas state, Brazil, in September 2020. WASHINGTON: Brazil's economy is set to shrink by 5.8 per cent in 2020, the International Monetary Fund said on Monday , revising up an earlier forecast but warning the country faced"excpetionally high" risks.
The government increased health spending, boosted financial support for state governments, extended state-backed credit lines and introduced employment retention schemes, which helped protect formal jobs during lockdown. The Washington-based Fund recommended the government"be prepared to provide additional fiscal support" if health, economic and social conditions were to worsen.
The unemployment rate is still rising and reached 13.8 per cent in the quarter between May and July, though other indicators such as industrial production showed improvements in August from the previous month, it said.
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