June 12, 2020


1. OECD, World Bank and IMF predict sizeable drop in Brazilian GDP

Three international organizations have released updated predictions regarding Brazil’s GDP – all of which project a deeper slide in this year’s figures than the official government forecast. Jair Bolsonaro’s economic team believes that the GDP will drop around -4.7% this year and that any forecast of a decrease greater than -7% is an exaggeration. The OECD reported that Brazil’s GDP will drop by -7.4% adding that it could drop as much as -9.1% if there is a second wave of virus. Moreover, the OECD projected that Brazil is likely to go through a deep recession this year due to the pandemic. For its part, the International Monetary Fund had already projected a -5.3% decrease following a study conducted in May. The World Bank predicted an -8% drop in the Brazilian GDP, and that the country will go through a more severe crisis compared to other South American countries, only to begin recovering its losses in 2021.

Valor Econômico: Governo vê exageros em projeções sobre queda do PIB
O Estado de S. Paulo: OCDE prevê tombo de 7,4% no PIB deste ano
O Globo: Crise será mais severa no Brasil, diz Banco Mundial

2. Investments hit a 24-year record low

The volume of monthly investments in Brazil has hit a record low not seen since 1996. Data shows that there was a -27.5% drop in April, the first complete month of social isolation measures intended to contain the coronavirus pandemic. According to the Institute for Applied Economic Research (IPEA), this drop was the largest since they began to measure investments in 1996. When compared to April 2019, the drop is even higher at -32.8%. Investments in machinery, equipment, construction and research have dropped -39.4% and production from these sectors dropped -43.4% in April. According to the director of Macroeconomic Policies and Studies at IPEA, José Ronaldo Souza Júnior, there is a possibility of recovery as economic activities are beginning to partially reopen and some governments are proposing to restart the economy in the next few months. “April was a very bad month. This crisis is something very different than what we are used to seeing,” he stated.

Valor Econômico: Investimentos têm queda recorde em abril
Folha de S.Paulo: Investimentos recuam 27,5%, diz Ipea

3. Brazil has the highest average of daily coronavirus deaths

Brazil has surpassed the United States and the United Kingdom in the daily average number of deaths from coronavirus, becoming first in the world ranking for lethality of the disease. On Wednesday alone there were 1,300 deaths from COVID-19. In seven days, Brazil registered 7,197 deaths caused by the disease. This means that, on average, 1,028 people have died in the country every day, according to the World Health Organization (WHO). At their respective peaks, the United States, where the pandemic is numerically more severe, 5,762 people died in seven days (an average of 823 a day) and Great Britain had 1,552 fatal cases (an average of 221 a day). Brazil is slowly easing restrictions, even though it has registered over 40,000 deaths and more than 800,000 people have been diagnosed with the disease. According to experts, the high number of cases in the country results from a lack of planning across state borders in controlling the spread of the virus and the situation could worsen with the easing of restrictions and reopening the economy. The WHO has already declared South America to be the new epicenter of the pandemic.

O Estado de S. Paulo: Brasil tem maior média de mortes diárias pelo coronavírus
G1: Acompanhe notícias sobre a pandemia
IRRD Covid-19: Veja o mapeamento de casos no Brasil e no mundo

4. Governors suspected of fraud in fight against COVID-19

The Federal Police suspects two Brazilian state governors of committing fraud in the purchase of mechanical ventilators used to treat patients with coronavirus. Other governors are also under investigation. This week, the Legislative Assembly of Rio de Janeiro initiated impeachment proceedings against governor Wilson Witzel (PSC), who is under investigation for overbilling companies contracted to supply ventilators for hospitals. Along with inflating the cost of the devices, the government is also under investigation for having bought saline solution that was overpriced by R$ 1.6 million (USD $316,455). The governor of Pará, Helder Barbalho (MDB), is also under investigation. He is accused of buying 400 ventilators that were overpriced by 86.6% at a total cost R$ 50.4 million (USD $9.97 million). Half of the amount was paid to the company in advance despite it not being registered with Brazilian health authorities. The investigation reveals that aside from delays in the delivery of the equipment, the models delivered did not match the specifications of the models that were purchased and were not adequate for treating patients with COVID-19. Governors deny irregularities and claim that they are being targeted by the federal government. They also claim that prices for the product have skyrocketed internationally.

TV Globo: Rio abre processo de impeachment de governador
Valor Econômico: Governadores dizem que estão sendo perseguidos
Valor Econômico: Governador do Pará é suspeito de fraude na pandemia

5. Federal government resurrects ministry to include representative from Centrão

Ministry of Communications in order to employ another member of Centrão in his administration. The ministry had been dissolved in 2016. Federal representative Fábio Faria (PSD) will be tasked with leading the department. Faria is married to one of the daughters of Silvio Santos, a TV host and owner of prominent television network SBT. According to a provisional measure published yesterday, the National Telecommunications Agency, the postal service, Telebrás and Empresa Brasil de Comunicação will be under Faria’s control. Faria is also a representative of the administration in the National Congress. During his presidential campaign, Jair Bolsonaro said that he would not offer government positions in exchange for support in Congress and that his administration would have no more than 15 ministries. There are now 23. Centrão is an alliance of parties that are offering support to the administration in exchange for jobs in the government. Members of the group have managed to gain inclusion in strategic positions and ministries. The group has also received R$ 6.2 billion (USD $1.2 billion) for lending support to parliamentary amendments.

UOL: Bolsonaro recria ministério em busca de aliados
O Estado de S. Paulo: Presidente cria ministério para deputado do Centrão
Folha de S.Paulo: Presidente se afasta mais de promessas eleitorais
O Estado de S. Paulo: Novo ministério não terá custo zero