Economy Minister Paulo Guedes said the Brazilian economy is undergoing a “V-shaped recovery”—a phrase used by economists to refer to an intense resumption following a dramatic decline in the economic activity.

The minister spoke Tuesday (Sep. 1) during an online hearing of the bicameral commission on the fiscal situation and budgetary and financial execution of the measures to tackle the novel coronavirus.

Guedes mentioned that April was the “floor” of the retraction in the Brazilian economy due to the influence of the COVID-19 pandemic, and argued the 9.7 percent shrinkage in the country’s gross domestic product (GDP) in the second quarter “is a sound from far away.”

“It’s the sound from the impact of the pandemic long ago, and it’s where Brazil would have stayed if we, alongside Congress, hadn’t done exactly everything we did. With the action we took, we managed to created a V rebound—the economy is coming back in a V,” he pointed out.

Forecasts

Guedes went on to say that the projections of analysts for the decline in the economy are improving.

“Starting now and going until the end of the year, I believe the [projected reduction] may lower even further. The truth is that [the economic activity] is coming back; and it’s coming back with two digits [of growth]. Credit is coming with two digits, electric energy consumption is coming back with two digits, electronic receipts are coming back with two digits. It’s all slowly coming back. It’s all coming back. By the end of the year, Brazil’s economic decline may be four or 4.5 percent, or even a little less. We can’t tell yet,” he declared.

For the coming year, the minister said, if the country continues to implement overhauls, it will be possible to unlock investment and allow the economy to resume growth.

“If we’re falling 3.5 percent this year, four percent, or 4.5 percent, we may be surprised by a growth of the same magnitude next year. We may be growing three, 3,5, four, 4.5 percent. It only depends on the pace of our reforms,” he stated, naming some of the administrative and tax reforms currently being discussed by Congress.