Affected by Covid-19 pandemic, Brazilians fear the country’s economic situation will worsen – Datafolha survey

RIO DE JANEIRO, BRAZIL – Two out of three Brazilians say the country’s economic situation will worsen, a record percentage registered by the Datafolha survey. According to the survey, 41% of Brazilians had such an expectation in December. Now, it stands at 65%.

Conversely, the percentage of people who expect an improvement in the economic scenario fell from 28% to 11%, according to the survey conducted on March 15th and 16th.

The previous negative record in the surveys which included this question, started in 1997, was the 60% registered in March 2015, during the recession under the Dilma Rousseff (PT) government.

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Pessimism is higher among women (71%) than among men (59%); it is also higher in the South (68%) and Southeast and Northeast (66%) than in the North/Midwest (59%).

The expectation of a worsening situation is as high as 72% among the unemployed and 69% among civil servants. It is 65% among people with a family income of up to two minimum wages and increases to 67% among those with an income of more than ten minimum wages. It stands at 67% among emergency aid recipients in 2020 and drops to 64% among people who did not apply for the benefit.

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In terms of perceptions that the country’s situation will improve, the highest percentages are found among students (18%) and entrepreneurs (17%), residents of the North/Midwest (14%), who say they are not afraid of the coronavirus (17%) and/or who rate the president as great/good (18%).

The deterioration in expectations about the country’s economic situation comes at a time when the health crisis is worsening, with record deaths, new measures to restrict circulation, and delays in the vaccination schedule.

The success of vaccination is pointed out by Bolsonaro’s government economic team as the only policy capable of recovering the economy.

Despite projections that the Brazilian economy will grow by 3.5% in 2021, after the 4.1% drop recorded in 2020, this figure does not effectively represent an improvement.

First, should the economy remain stagnant for the whole year, at the same level as in the last quarter of 2020, it will have 3.6% growth on average for the year. It will therefore remain below the level before the current crisis, which was lower than the peak of activity before the 2014-2016 recession.

Moreover, a worsening in income, employment, and inflation indicators is expected, among other indices that more directly reflect economic conditions for people.

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As the new survey showed, the rating of the Bolsonaro government has dropped to the May and June 2020 levels, the worst of his government, in light of the shortcomings in managing the health crisis and its impact on the economy.

The survey was conducted before the Central Bank announced its first increase of the basic interest rate in six years and said that the SELIC should continue to rise in the coming months, due to the risk of uncontrolled inflation, despite the still sluggish economy.

Read: Oxford Economics: New pandemic aid will boost Brazil’s GDP to 3.8% in 2021

The Datafolha telephone survey interviewed 2,023 Brazilians nationwide. The error margin is two percentage points plus or minus.

Source: Datafolha