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January 14, 21 - 10:41 am - Reuters

Brazil’s delay in vaccine distribution adds risk to economic recovery

Photo: Fotos Públicas/GOVESP

Brazil‘s delays in delivering a coronavirus vaccine increase the negative risks to the country’s economic recovery expected in 2021. The analysis is by the risk rating agency Moody’s.

Despite being under pressure, the Brazilian government has not yet started immunization and the Brazilian health regulator, Anvisa, has not yet approved the use of any vaccine. According to Anvisa, the decision on the emergency use of the Coronavac and Astrazeneca vaccines will be announced next Sunday (17).

Samar Maziad, Moody’s analyst for Brazil, said in a press conference that the vaccine will make it possible to reduce social distance measures and, consequently, will bring benefits to local businesses and the economy. “Therefore, the delay increases the negative risk for recovery,” she explains.

Recovery – Maziad also said that the end of emergency aid, worth almost 300 billion reais, could slow the recovery and perhaps foster social unrest.

“The end of aid represents some social risk and, with high unemployment, there are some risks for the economy. But not a high risk. The main risks remain on the fiscal side. “

Maziad refers to the government debt ceiling. The cost of the economic and health crisis last year threatens the rule that limits the increase in public spending according to the rate of inflation. Exceeding this debt ceiling would affect Brazil’s credit profile, says Maziad.

Today, Moody’s has a Ba2 rating for Brazil’s sovereign credit, below the so-called investment grade, with a stable outlook. Moody’s expects Brazil’s economy to grow 3.3% this year, after dropped 5.7 % in 2020.

Translated by LABS.