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How has the pandemic affected Brazil’s different regions?
José Roberto Castro . Jul 15, 2020
Protest against Jair Bolsonaro's coronavirus response in Brasília. Photo: Gabriel Paiva/FP
As we never tire of saying on The Brazilian Report, Brazil is such a vast country, with immense diversity among its regions, states, and cities. For example, the population of the state of São Paulo is 74 times that of northern state Roraima. The Federal District — where capital city Brasília is located — enjoys a Human Development Index (HDI) similar to Portugal. Meanwhile, in northeastern states Alagoas and Maranhão, the index is the same as Iraq. Therefore, when we deal with nationwide economic data in Brazil, enormous regional differences are often masked.
As a result of the Covid-19 pandemic, Brazil’s GDP is expected to fall around at least 6 percent this year. But such a unique situation as this coronavirus epidemic — with its myriad social, political, and economic consequences — has different effects depending on which part of Brazil you are looking at.
Below we have laid out five crucial indicators to illustrate the current moment in Brazil. Crucially, however, they are all split into the country’s different regions or, where possible, states.
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<h2>Economic activity</h2>
<p>Every month, Brazil’s Central Bank publishes its economic activity index (<a href="https://comoinvestir.thecap.com.br/calendario-economico-divulgacao-do-ibc-br-e-votacao-da-mp-927/">IBC-Br</a>) which is taken as a trustworthy predictor of GDP figures, which are only released months later. In the latest figures, corresponding to the month of May, we saw a modest increase in relation to April, but a profound 14.24 percent fall in comparison to May 2020 — considerably below analysts’ expectations. </p>
<p>Approaching this data through a regional lens allows us to examine the trends in more detail. In order to do this, however, we will have to step back to the figures for April 2020, as the latest update for May includes only nationwide trends. When we look at the accumulated losses between February and April in all Brazilian regions, the more populous Southeast, South, and Northeast suffered falls of around 10 percent, while the Center-West region fared much better. Famous for its agribusiness and exports, the Center-West only lost around 4 percent of economic activity in the first two months of the pandemic.</p>
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<h2>Retail sales across Brazil</h2>
<p>Commerce figures have been on something of a rollercoaster since the beginning of the pandemic. In April, the retail sales index had its most profound drop on record, followed by the highest increase in history in May. However, when we compare these figures to last year, the overall impact of the pandemic becomes clearer.</p>
<p>When looking at a state-by-state comparison between March, April, and May of 2019 and 2020, the drop-offs are significant. In states such as Ceará, Rondônia, and Amapá, sales plunged by around 30 percent.</p>
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<h2>Formal jobs</h2>
<p>Recessions invariably lead to people losing their jobs. Indeed, in March, April, and May of this year, the country lost 1.48 million formal job positions, according to the General Register of Employed and Unemployed Persons (Caged) — the institution in charge of monitoring every formal hire and dismissal in Brazil.</p>
<p>This means 3.8 percent of all <a href="https://brazilian.report/business/2020/07/06/latin-america-brazil-mexico-face-similar-job-market-woes/">formal job positions in Brazil</a> have been lost. Compared to the total number of posts in each state, the impact was particularly large on states in Brazil’s South, as well as Rio de Janeiro and Pernambuco.</p>
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<h2>Emergency salary </h2>
<p>Despite the worrying figures of formal unemployment, this only goes part of the way in telling the full story of <a href="https://brazilian.report/business/2020/06/24/pandemic-could-create-an-entire-lost-generation-in-brazil/">Brazil’s veritable job apocalypse</a> amid the pandemic. Around 40 million people in the country work in unregistered jobs, and, during the Covid-19 crisis, the government was forced to act in order to provide them with aid. A monthly coronavirus emergency salary aims to pay every Brazilian with no income during the quarantine. </p>
<p>All over the country, 53.9 million people received aid — comprising BRL 600 (USD 112) paid in five installments. Some regions are much more dependent on aid than others, however. In the southern state of Santa Catarina, less than 20 percent of the adults received the benefit, while over 40 percent in Roraima have been given the money.</p>
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<h2>Presidential approval </h2>
<p>For several reasons, the Covid-19 pandemic is the worst crisis of Jair Bolsonaro’s administration. After dismissing the severity of the disease and focusing on jobs and economy as opposed to health, the president has lost support from voters. But at the same time, part of this decrease has been offset by bumps in popularity in surprising regions, <a href="https://brazilian.report/power/2020/07/05/bolsonaro-wants-to-win-over-brazil-northeast-region/">such as the Northeast</a>.</p>
<p>According to pollster Datafolha, Jair Bolsonaro’s approval ratings have increased in the Northeast region — which is most dependent on the emergency aid — and Center-West, which has the best economic numbers among Brazilian regions. On the other hand, Mr. Bolsonaro lost support in the North and Southeast, where the highest number of coronavirus cases have been seen.</p>
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<p>Another poll, by Ideia Big Data, also shows the president’s soaring popularity. His overall rejection has dropped from 50 to 45 percent over the past month. Considering the confidence interval, the improvement is not <em>that</em> big — still, it is outside of the margin of error and indicates a positive trend to Mr. Bolsonaro. Mauricio Moura, chief executive officer at the polling company, told <strong>The Brazilian Report</strong> the reason: “it is thanks to the coronavirus emergency salary.” </p>
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