June 4th, 2021
1. Economy grows above expectations and GDP returns to pre-pandemic levels
According to data published this week by the Brazilian Institute of Geography and Statistics (IBGE), Brazil’s Gross Domestic Product (GDP) grew 1.2% in the first three months of the year, reaching a total of R $2 trillion (USD $394.6 billion). When compared to the same period of the previous year, this figure registered 1% growth. Forecasts suggest that growth will continue, but at a slow pace. “With the results of the first quarter, the GDP returned to levels from the fourth quarter of 2019 – pre-pandemic times. But it is still 3.1% below the highest economic activity level in Brazil, which was registered in the first quarter of 2014,” stated IBGE.
In the three big sectors of the economy, the most significant growth was in the farming sector (5.7%), followed by the industrial sector with 0.7% growth and the service sector, with 0.4% growth. According to the National Accounts Coordinator at IBGE Rebeca Palis, even though the country faced a worsening of the pandemic, the GDP reacted differently than last year. “There weren’t as many restrictions keeping economic activities from operating in the country,” she says. GDP results positively surprised financial markets, leading some financial institutions to up their economic growth projections by 5% or more.
2. Worst drought in 91 years increases risk of blackouts at peak times
Experts in the energy sector believe that there is a risk of blackouts at peak times due to the worst drought in 91 years and a water emergency alert. Blackouts could happen in the second half of the year if precipitation remains at its current level. Water reservoirs in the southeast and center-west regions – where the hydroelectric plants of Itaipu, Jupiá, Ilha Solteira and Porto Primavera are located – have water supplies below what was seen in 2020. On May 30th, the National Electrical System Operator indicated that there was a reserve of 32.2%. One year ago, it was at 55%. This subsystem is responsible for 70% of Brazil’s hydroelectric energy. Due to the reduced supply at hydroelectric plants, the country will need to use thermoelectric plants, which are more expensive and produce more pollution.
Although they deny the risk of energy rationing, the administration has requested a meeting with Pedro Parente, who participated in the energy crisis of 2001. Parente, a former Finance Minister in Fernando Henrique Cardoso’s administration, will meet with Mines and Energy Minister Bento Albuquerque. Parente considered the diagnosis of the crisis to be accurate and said that rainfall levels leading up to November will be decisive. The Ministry of Mines and Energy stated that efforts to avoid a crisis are concentrated on managing restrictions of hydroelectric plant operations. They recommend saving the reservoirs and coordinating the use of water for other purposes such as navigation and irrigation.
3. Targeted at CPI, Pazuello returns to the administration and escapes punishment by the Army
This week, former Health Minister Eduardo Pazuello – who is one of the main targets of the COVID-19 parliamentary inquiry (CPI) – was nominated to the position of Secretary for Strategic Studies of the presidency. Pazuello, who is a general in the Brazilian Army, was also under investigation by the Army for a disciplinary infraction for having participated in a political act with President Jair Bolsonaro on May 23rd. Members of the armed forces are forbidden from participating in political acts. Following pressure from the president, the Army decided not to punish Pazuello.
In his first appearance at the CPI – which is investigating federal government neglect in the fight against the pandemic and the misappropriation of funds from states and cities – Pazuello did not blame the president for the delay in purchasing vaccines, for unduly recommending the use of hydroxychloroquine for treating patients diagnosed with COVID and for campaigning against restrictions and social isolation. Pazuello is set to be deposed again by the CPI. During an event at the Ministry of Health, Bolsonaro asked for applause for the former minister and defended him to his supporters.
4. National vaccines against the coronavirus could be available by October
Two Brazilian vaccines could be made available between September and October. Fiocruz (Fundação Oswaldo Cruz), which is associated with the federal government, plans to provide a coronavirus vaccine that does not require the importation of ingredients by October. Instituto Butantan plans to deliver its vaccine a month before that. Fiocruz’s plan was announced this week, following a contract with AstraZeneca – which produces the drug in a partnership with Oxford University – for transferring the technology. Initial testing will be undertaken in partnership with a lab to ensure safety and efficacy standards. After this stage, the foundation’s vaccine must be authorized by Anvisa (Brazilian Health Regulatory Agency). They plan to produce 15 million doses of the vaccine a month.
Instituto Butantan, which is associated with the São Paulo state government, is waiting for Anvisa to approve tests for ButanVac – the vaccine that will replace CoronaVac. The plan is to have 40 million doses available by September. On Wednesday, São Paulo’s state government announced their plan to vaccinate the entire adult population of the state by October. Previously, the plan was to have everyone vaccinated by December. The importance of vaccination was reinforced with the publication of a study performed in Serrana, in the state of São Paulo, where 59.5% of the people were vaccinated with CoronaVac and the number of deaths and new cases plummeted. So far, 22.2% of Brazilians have received the first dose of the vaccine and 10.7% have received the second. On Wednesday, during an address to the country, President Jair Bolsonaro reinforced the promise to provide vaccines for every Brazilian by the end of the year.
O Globo: Fiocruz vai produzir vacina nacional até outubro
Folha de S.Paulo: SP promete vacinar todos os adultos até outubro
O Estado de S. Paulo: Teste em Serrana mostra eficácia de vacina
Folha de S.Paulo: Bolsonaro promete vacina para todos neste ano
G1: Veja como está a vacinação no país
5. Bolsonaro authorizes Copa América in Brazil, causing controversy
President Jair Bolsonaro authorized Brazil to host Copa América, a continental soccer tournament, from June 13th. The matches will not be open to the public. Bolsonaro said he was asked by the Brazilian Soccer Confederation and since the country is already hosting other competitions “without problems,” he discussed the proposal with ministers and decided to host the soccer event. The competition was originally going to take place between Colombia and Argentina, but protests in the former led to the tournament’s organizers to cancel their plans, and the latter’s government opted not to host it due to the worsening state of the pandemic in the country.
In a post on Twitter, CONMEBOL (the South American Football Confederation), which is responsible for the event, thanked the Brazilian government for hosting the event. “The best soccer in the world will provide joy and passion to millions of South Americans. CONMEBOL thanks President Jair Bolsonaro and his team for opening their doors to the safest sporting event in the world.” Experts criticized the decision. According to them, an event this size increases the number of people traveling within the country and presents a risk of importing new variants of COVID-19 resulting in increased contamination rates. Over 467,000 people have died due to the coronavirus in Brazil and 16.7 million people have been contaminated.