IBR - International Business Report

Daniel Maranhão, Grant Thornton Brazil's CEO, attributes the drop in optimism about the world economies and, more intense in Brazil, to the impacts of the Covid-19 pandemic directly in business and, also, to the worsening in some political scenarios. "The risk agencies, such as Fich, expect a 4.6% drop in world GDP. But for Brazil, the expected drop may be greater than 7%. This is due to the political scenario. In the previous IBR study edition, Brazil had just approved the Social Security reform and was already talking about approving the Tax and Administrative reforms. Now, six months later, we have greatly increased the fiscal deficit with the necessary spending to help families and businesses, such as measures

to help the business cash flow and reduction of the working day to maintain jobs. However, we are not moving forward with either of these two important reforms. Apart from this, there is a more turbulent scenario between government and STF (FCJ) and municipal elections ahead. In the US, Trump's reelection, which was taken for granted before the pandemic, is no longer a certainty, the scenario is quite balanced, and neither the capital market nor entrepreneurs like to work with uncertainty. As soon as these scenarios start to become clearer and the reforms and economic measures, such as some privatizations in Brazil, move at a faster pace, the optimism of the business community will certainly return, along with the recovery of the economy in the second half of the year," says the executive.