Today, we bring you projections for the looming Brazilian recession. China’s move to ban Brazilian meat due to coronavirus scares. And how Brasília’s failed reopening epitomizes the country’s botched response.
Brasília, we have a recession
Brazil entered a recession in the first quarter of 2020, after three years of sluggish but consistent growth. According to the Economic Cycles Dating Committee, linked to think tank Fundação Getulio Vargas, this recession might not last for that long, when compared to previous ones over the past 40 years. However, it is set to be the most intense downturn.
- A recession is typically recognized as two consecutive quarters of economic decline. While Q2 numbers have yet to come out, it is certain that they will be well under zero. GDP contracted -1.5 percent in Q1 and is expected to fall by as much as 10 percent in Q2, the height of quarantine measures.
Why it matters. The economy was already in poor shape. This means that the economic recovery will not be V- or W-shaped. Instead, it will take the shape of a K — wealthy groups getting back on their feet while poorer workers lose purchasing power, widening the distance between them.
Why...