Brazil’s GDP dropped by 4.1% in 2020, some 4% less than forecasts made by the likes of the World Bank and the International Monetary Fund (IMF) earlier in the year.
Latin America’s largest economy avoided a sharper contraction largely due to direct cash handouts and the strong economic rebound in the final quarter of the year, analysts say.
The government delivered more than US$54 billion to poor families last year, helping to mitigate the impact of the pandemic that forced millions of people to stay at home for weeks on end.
The economy is now firmly on a path of recovery after registering a 3% growth in the fourth quarter of 2020.
The surge in economic activity came following a rebound in the services sector, which reported 2.5% growth in Q4. The agriculture industry also played a role in protecting the country from a harsher recession, say analysts.
However, Brazil is not completely out of it the woods yet and the country has seen hundreds of people dying each day due to the Covid-19 virus over the last few weeks.
Opposition parties remain angered by President Jair Bolsonaro’s reaction to the country’s high death toll and the refusal to impose a lockdown despite the growing number of deaths.