Leading banks Goldman Sachs and JP Morgan have cautioned that Brazil’s economy is set to experience a recession this year on account of the coronavirus pandemic. A couple of weeks ago, Goldman Sachs revised economic growth forecasts for Brazil from +1.5% to -0.9% while JP Morgan estimates that the Brazilian economy could contract by as much as 1% in 2020.

JP Morgan has gone so far as to term an economic recession in Brazil unavoidable as the coronavirus crisis weighs heavily on global markets and sours the outlook all around the world. On Wednesday, Brazil’s central bank had announced a 50bp rate cut, sending interest rates to a record low of 3.75%, with some analysts forecasting more rate cuts.

Overall economic growth in Latin America has also been revised down from +1.1% to -1.2% by economists at Goldman Sachs. This is on account of the anticipated reduction in global trade, investment and demand as leading economies turn their focus towards protecting themselves from the economic impact of the spread of the virus.

So far, there have been over 215,000 cases of infection worldwide while the death toll has crossed 8,000. In Brazil, the numbers stand at over 300 infections as per latest reports.