August 14, 2020


1. Bolsonaro obtains highest approval rating since the beginning of his administration

A Datafolha poll revealed that President Jair Bolsonaro has the highest approval rating since the beginning of his term last year. The Bolsonaro administration is assessed as great or good by 37% of Brazilians. In the previous poll – conducted at the end of June – this number stood at just 32%. 2,065 people were interviewed by phone on August 11th and 12th with the poll having a margin of error of plus or minus two percent. Another favorable indicator is a significant drop in the rejection rate. The number of people who considered the administration bad or awful went from 44% to 34%. The number of people who see the administration as average increased from 23% to 27%. Since 2019, the president’s best results were 33% of people rating his administration as good or great. According to the poll, the most significant drop in the rejection rate was among young people, who are between 16 and 24 years old. In this group, rejection rate dropped from 54% to 41%. Other significant drops were among voters with higher education (53% to 47%) and among voters with an income above 10 times the minimum wage (from 52% to 47%). With this performance at the polls, Bolsonaro is no longer the president with the worst approval ratings in his first term since the return to democracy. He is now ahead of Fernando Collor, but he still has lower ratings than Fernando Henrique Cardoso (PSDB), Luiz Inácio Lula da Silva (PT) and Dilma Rousseff (PT).

Folha de S.Paulo: Aprovação a Bolsonaro cresce e é a melhor do mandato
O Globo: Para aliados, “Jairzinho paz e amor” deu resultado

2. President supports spending ceiling after series of resignations in Economy Ministry

This week, Economy Minister Paulo Guedes faced two significant resignations in the first tier of his team and had to receive help from President Jair Bolsonaro to avoid a larger problem. Unhappy with the obstacles delaying reforms, Special Secretaries Salim Mattar (Destatization) and Paulo Uebel (Debureaucratization) decided to leave the administration due to their belief that there has not been enough advancement towards the privatization of state companies or administrative reform. The “stampede,” as Guedes himself called it, led Bolsonaro to defend his minister on social media, demonstrating support for the sale of deficit state companies to private companies and respecting the spending ceiling. The ceiling is a constitutional mechanism that prevents the administration from spending more than in the previous year, considering inflation. The president is under pressure for not respecting the ceiling and for releasing funds for construction works aimed at improving the economy amidst the pandemic. Legislative presidents Davi Alcolumbre and Rodrigo Maia, from the Senate and Chamber of Deputies respectively, have shown support for Guedes’ fiscal responsibility policy. However, within the administration, some ministers argue that the emergency authorization to spend above the ceiling due to the pandemic should be extended to next year. “The president’s advisors who are suggesting that he cheats and breaks the ceiling will take the president to a dark area, an area of impeachment and fiscal irresponsibility,” said the Economy Minister.

Valor Econômico: Guedes recebe apoio de Bolsonaro para agenda liberal
O Estado de S. Paulo: Governo quer criar novos freios para gastos públicos
Folha de S.Paulo: Bolsonaro defende privatizações e teto de gastos
O Globo: Secretários especiais de Guedes pedem demissão

3. Workers fund will distribute R$ 7.5 billion to combat the effects of the pandemic

At the end of August, workers will receive a percentage of the profit obtained through the Severance Indemnity Fund (FGTS). The fund is a mandatory benefit in which employers deposit a monthly amount that can only be used in case of unfair dismissal, retirement or purchase of real estate. The council for the fund will distribute R$ 7.5 billion (USD $1.39 billion) representing 66.2% of the profits from last year, which totalled R$ 11.3 billion (USD $2.09 billion). Last year, the administration distributed 100% of the 2018 profits from the fund – R$ 12.22 billion (USD $2.26 billion) – to active and inactive accounts. However, at the end of 2019, President Jair Bolsonaro vetoed future distribution of full profits. FGTS was created to protect workers, with the government using some of the money to finance credit lines for infrastructure, housing and basic sanitation. According to the Director of the Department of Fund Management in the Ministry of Economy, Gustavo Alves Tillmann, the distribution of just R$ 7.5 billion creates a reserve for future distribution if the economic situation does not improve. 

G1: FGTS vai distribuir R$ 7,5 bilhões de lucro
O Estado de S. Paulo: Conselho libera distribuição de lucro do FTGS

4. Industrial production grows in 14 of the 15 regions examined by IBGE

The Brazilian Institute of Geography and Statistics (IBGE) reveals that industrial production grew in 14 of the 15 metropolitan regions that the institute monitored. Growth in June – in comparison to May stood at an average of +8.9%. Despite the improvement, the losses due to the lack of activity in the period of social isolation have not been recovered. The São Paulo industrial sector has demonstrated accelerated growth during the period in which economic activities are returning to normal, with 8.9% in May and 10.2% in June. Despite this positive performance, plants from São Paulo have presented an accumulated growth of 20% in May and June, but this does not yet mitigate the 29.4% decrease seen in March and April. Other states have demonstrated similar results, such as Amazonas (65.7%), Ceará (39.2%) and Santa Catarina (9.1%). According to IBGE, only Mato Grosso has registered a drop in production of -0.4%. Rafael Cagnin, an economist from the Industrial Development Study Institute (IEDI), says that the performance of the sector in June was “spread out” due to companies returning to their activities and due to the government providing benefits such as the emergency aid – a source of income to some poor families. According to economist Silvio Sales, former industry coordinator for IBGE, national production had dropped 2.7% and, in the second quarter, the pandemic led to a 17.5% retraction in the sector. “Rock bottom was undoubtedly hit in April and has now passed, but these numbers – closer to reality – show that recovery doesn’t have a ‘V’ shape,” he said.

Valor Econômico: Indústria volta a crescer em 14 regiões

5. Coronavirus is more common among 18 to 34 year-olds in São Paulo

A new phase of the serology research developed in the city of São Paulo reveals that coronavirus is more common in people between 18 and 34 years old. According to the study, which collected 2,532 samples in 5,560 houses, 17.7% of people from this age group have been in contact with the virus. It is the largest rate among the groups assessed in the research. Among 35 to 49 year-olds this rate is 10.6% and among people over 65 it is 6.8%. The prevalence of the virus among those who work outside their homes (18.5%) is twice the prevalence among those working from home (6.2%). The infection rate among unemployed people is 12.7% – double that of people working from home. According to the study, 1.3 million people have contracted COVID-19 in São Paulo. The state has the largest number of deaths and confirmed cases. This week, Governor João Doria tested positive for the virus. The country has plateaued at a high number of deaths for several weeks, with a death rate of 900 to 1,000 people per day. According to data provided by state governments, there are over 105,000 deaths and over 3.2 million confirmed cases in total nationwide.

Folha de S.Paulo: Prevalência de Covid é maior entre jovens de 18 a 34 anos
G1: Casos são mais frequentes em quem trabalha fora
O Globo: Acompanhe notícias sobre a pandemia
IRRD Covid-19: Veja o mapeamento de casos no Brasil e no mundo