We’re covering today the positive economic indicators of May — is the recovery real? Facebook strikes down a pro-Bolsonaro disinformation network. And VP Mourão meets with CEOs to talk about the Amazon.
Is Brazil’s recovery real?
Brazilian economic indicators for May are better than expected and have elicited some excitement among the markets. Retail sales recorded “the biggest spike in 20 years,” industrial production was up in nearly all surveyed areas, and estimates for grain production are also positive. However, it is still too soon to pop the corks.
- May results are indeed quite positive — if compared to April, when economic activity was severely down due to strict social isolation measures. As states reopened, a bounceback was expected. Still, economic activity in most sectors remains below pre-pandemic levels. Comparing May 2020 numbers against May 2019 leads to a significantly bleaker picture than month-on-month rates might suggest.
The biggest risk. Credit policies meant to help small- and medium-sized businesses have failed, despite the government’s efforts. Banks are in a risk-averse mode — and big corporations are gobbling up the lion’s share of credit during the pandemic. Experts still fear a tsunami of bankruptcies in the coming months.
Don’t expect a V-shaped...