Good morning! We’re covering the positive (yet timid) signs of economic recovery in Brazil (GDP numbers). And a bill which would send Lula back to prison progresses in Congress. (This newsletter is for platinum subscribers only. Become one now!)
Brazilian GDP at pre-crisis levels?
With lower interest rates, Brazilians are having access to more credit and are beginning to consume more. Researchers at think tank Fundação Getulio Vargas estimate a 2-percent growth in family consumption this year. With benchmark interest rates expected to get even lower, predictions are better still for 2020, with consumption tipped to reach 2014 levels, before Brazil fell into recession.
Why it matters. Family consumption accounts for two-thirds of Brazil’s GDP.
GDP growth not widespread. Retail and services are sectors that have observed substantial improvements in 2019. The labor-intensive construction sector is also showing signs of a recovery, albeit a slow one. However, things remain bleak for Brazil’s industry—which continues to shrink and hemorrhage jobs.
Red flags. More access to credit in a still-sluggish economy could further bury Brazilians into debt. The country currently has 63 million debtors—and the extension of the gig economy offers little cushion for many workers.
As a bid to limit this...