The State of Pará

The international economic scenario presented more optimistic perspectives in relation to the growth of the global GDP in 2021, when compared to the year of 2020 motivated by the distribution of vaccines in the fight against COVID-19. The International Monetary Fund (IMF) estimated, in its latest World Economic Outlook (WEO) report, published in April 2021, that after an estimated contraction of -3.3% in 2020, the global economy is projected to grow 6% in 2021 moderating to 4.4% in 2022. The positive outlook for the IMF‘s 2021 projection is the result of additional fiscal support in some influential economies and the anticipated vaccine-based recovery in the second half of the year.

WEO also shows that the IMF‘s expectation for advanced economies is -5.5% for 2021 and 4.2% for 2022. For emerging markets and developing economies, the estimate is 6.7% in 2021 and 5.0% in 2022. As for Emerging Asia, the projection for increase is 8.6% for 2021 and 6.0% for 2022.

In the national scenario, data from the National Accounts released in March 2020 by the Brazilian Institute of Geography and Statistics (IBGE), show that the GDP of the Brazilian economy closed the year 2020 with a retraction of 4.1% in relation to 2019, however the sector sector that was highlighted as Agropecuária presented an increase of (2.0%) and the Services sector presented a retraction of (-4.5%). The growth of Agropecuária was due to the growth in production and productivity gains in the Agriculture activity, and in the Services sector, it is worth mentioning that the services provided to families are the most negatively affected by the restriction of functioning and social distance due to the pandemic of COVID- 19.

The expectation of the Central Bank of Brazil (BC) published in the March 2021 Inflation Report for the GDP growth of the Brazilian economy in 2021 decreased to 3.6%, compared to the 3.8% presented in the previous edition of this report. This relative stability in the projection reflects the positive increase in GDP in the fourth quarter of 2020, and the maintenance of economic activity at a high level in the beginning of 2021.

In relation to the price level, the Extended National Consumer Price Index (IPCA) changed by 0.93% in March and was 0.07 percentage point (pp) above the rate (0.86%), this is the highest result for a month of March since 2015, the highlights of greater variation reached the transport and housing groups, which presented in March an increase of 3.81% and 0.81%, respectively, however, the group of education decreased by -0.52%. The index accumulated in the last twelve months was 6.10%, against 3.30% in the immediately preceding 12 months.

According to the Focus Survey conducted by the BC, the market forecast for inflation increased by the median of the projections for the annual variation of the IPCA in 2021, from 3.87% on March 1, 2021 to 4.81% in March 29, 2021. The estimate for 2022 increased from a median of 3.50% to 3.51% for the same period.

In the regional scenario, the expectation of the Amazon Foundation for the Support of Studies and Research (FAPESPA) for the growth of the economy of Pará was more optimistic in the 1st quarter of 2021. In March, the Foundation projected the real growth of Pará‘s GDP in 2021 to 2.65%, compared to -0.5% forecast in July, influenced by the economic recovery after the impacts of the Coronavirus. Regardless of the optimistic estimates for the economy of Pará, data from the March IBGE are positive and still do not seem to reflect the impact of the pandemic on the Pará economy.

The index of regional economic activity in Pará (IBCR-Pa) of January 2021 changed by 5.02% in relation to January 2020 (seasonally adjusted series).

The industry of Pará also presented a positive result, according to data from the Monthly Industrial Survey - Physical Production (PIM-PF) of the IBGE of January, the industrial production of the State presented an increase of 4.4%, in relation to the previous month (seasonally adjusted series ). This result was motivated by good results in the sectors of extractive industries, mainly iron ore and metallurgy.

As for local commerce, data released by the Monthly Survey of Commerce (PMC) of the IBGE show that the volume of sales of the retail trade of the Pará economy presented a change of -0.2% in the month of January 2021 in comparison with the immediately previous month. , in the seasonally adjusted series.

Regarding inflation, data from the IBGE of March 2021 show that the IPCA calculated in the metropolitan region of Belém in the accumulated of the last 12 months was 6.44%. In the month of March, this index calculated in the State presented deflation of 0.8%, highlighting the food and beverage group, which presented a result of -0.06% in the same period.

In terms of fiscal management, Pará has a good concept with the National Treasury Secretariat (STN). According to the Finance Bulletin of the Subnational Entities 2020 of the National Treasury published in October 2020, the State presents the "B" note of CAPAG (Classification of Payment Capacity).

[1] World Economic Outlook - quarterly report on economic expectations, released by the IMF.