RIO DE JANEIRO, BRAZIL – Central Bank President Roberto Campos Neto said on Monday, November 9th, that the labor market will not rebound as fast as economic activity after the novel coronavirus pandemic.
The monetary authority head said in a virtual event promoted by The Economist magazine, that the technological advance during the crisis was so fast that it impacted labor allocation, particularly of casual workers.
“Consumption is rebounding and so is the GDP [Gross Domestic Product], but the labor market is not. That’s because technology has advanced so fast that there has been little time to reallocate the workforce,” he said.
“The pandemic has introduced changes in consumption patterns. Some will return to what they were before, others will not,” he pondered.
Campos Neto pointed out that there is no fiscal room for more government programs to fight the impact of the pandemic in emerging economies, particularly in Brazil.
“The government needs to create more programs, which means more spending, and this brings us to the question: do we have fiscal room for this? The answer, at least in emerging economies, particularly in Brazil, is likely to be no,” he declared.
According to Campos Neto, society has demanded a sustainable and inclusive recovery. In his perspective, the economic growth of the next years will need to be promoted with private money.
“We are losing money in the portfolio because interest rates are lower and lower, but we are growing in investments in the real estate sector,” he compared.
Source: Folhapress