We analyze GDP data in detail to understand the impacts of the coronavirus crisis in Brazil. Political violence could be part of our “new normal.”
The anatomy of impending crisis
Brazil’s GDP dropped 1.5 percent in the first quarter of 2020, announcing the beginning of what could be the worst Brazilian recession on record. This crisis will be unlike all others, warns Rebeca Palis, head of National Accounts at the Brazilian Institute of Geography and Statistics. “For the first time in our recent history, the economy is suffering a shock in both demand and supply,” she says.
- On the production side, the services sector was down 1.6 percent. The segment accounts for 70 percent of Brazil’s GDP.
- Meanwhile, family consumption dropped 2 percent in the quarter — the worst since Brazil’s 2001 energy crisis. That drop could be more severe in the next few months, as the rate of people without a job is set to rise.
Construction. Not even the labor-intensive construction sector — one of the biggest drivers of Brazil’s economic boom in the 2000s — is holding up. The segment is down 2.4 percent, despite the fact it was considered “essential” and allowed to continue during quarantines. “The...