Study: Covid-19 could double unemployment rate

unemployment rate

On top of the 11.9 million Brazilians already out of a job, another 12.6 million workers face unemployment due to the coronavirus outbreak, per a study by think tank Fundação Getulio Vargas. Without more effective fiscal policies, the unemployment rate could go from the current 11.6 percent to a whopping 23.8 percent — which would be the worst drop in over 40 years.

The study also projected the Brazilian GDP shrinking by between 3.4 and 7 percent in 2020. The findings are similar to those published by top financial institutions such as banks Santander and Itaú Unibanco, the latter of which predicted a contraction of 6 percent.

The average income in the country should fall by 5.2 percent. And, without the BRL 170-billion (USD 33.3 billion) package announced by the federal government, this drop could be as high as 10.3 percent.