Institute predicts a brutal drop in employment and income due to coronavirus in Brazil

The already announced government measures will not be enough to prevent a great loss of jobs and income in the country

brazilian currency
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  • Ibre/FGV estimates that, with the measures, the expected fall in the country’s expanded mass of income, which includes also social security and social assistance benefits, is -5.3%;
  • On the other hand, without the government’s new policies, the expanded income mass would have fallen 10.3% this year.

According to the Brazilian Institute of Economics of the Getulio Vargas Foundation (Ibre/FGV), one of the most respected institutes in the country and in Latin America when it comes to the labor market and economic policies, the unemployment rate, the wage mass, and the total mass of income in Brazil will have the worst performance in their historical series in 2020.

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As reported by the newspaper Valor Econômico, which had access to the institute’s April bulletin before its regular publication, the already announced government measures will not be enough to prevent a great loss of jobs and income in the country.

Ibre/FGV estimates that, with the measures, the expected fall in the country’s expanded mass of income, which includes also social security and social assistance benefits, is -5.3%. On the other hand, without the government’s new policies, the expanded income mass would have fallen 10.3% this year.

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This is mainly due to the fact that the Brazilian labor market was far from recovering from the crisis from 2014 to 2016, a period in which the unemployment rate went from 6.7% to 11.5% in the country. After reaching 12.7% in 2017, the rate fell slightly in the following two years, first to 12.3%, then to 11.9%. With the crisis, Ibre / FGV projects a rate, at the end of 2020, at 17.8%.

This would be the highest level ever achieved by the indicator monitored by the Brazilian Institute of Geography and Statistics (IBGE) since 1981, according to Ibre/FGV.