Brazil: economist says unemployment “will be visible” after July

By Camila Abdo

For economist Márcio Furtado, superintendent at the Ministry of Economy during the Bolsonaro government, the economic policies adopted by Lula’s government team haven’t started to be “visible” to the population.

Unemployment, for example, will begin to be deeply felt in the coming years. Furtado spoke exclusively to Revista Oeste.

The economist explains that it is necessary to observe the General Cadastre for Employed and Unemployed (Caged) to measure the impact of unemployment in 2023.

On March 9, the Caged informed that January had 1,874,226 hirings and 1,790,929 dismissals.

Unemployment insurance claims rose from 533,028 in December to 614,085 in the same month.

Furtado also believes that there will be no economic growth.

According to the former superintendent, Brazil will stay “between 0% and 0.75%”.

The economist predicts that in 2024 “the GDP will be negative”.

For Furtado, “there is no path” to privatizing the companies promised by president Lula during the 2022 election.

The economist also classified the idea of using the Post Office to replace Uber as ” unfortunate ” by the Minister of Labor and Employment, Luiz Marinho.

You said that unemployment would be visible from the second quarter on. What metrics are you using for this statement?

In the first moment, we will observe the next Caged reports capturing the medium-scale layoffs occurring mainly in technology companies, the downsizing of retail companies, and factory closures in the industrial sector.

Subsequently, this mass of laid-off professionals will find it difficult to relocate, hitting the unemployment rate hard in the medium term.

Depending on the sector, it can take up to two years for a person to relocate.

We will also see the number of unemployed people who have given up looking for a new job increase in 2023 and 2024.

What comes of the new fiscal framework and tax reform can further deteriorate Brazil’s economic activity in this and the coming years – which fatally culminate in increased unemployment.

Lula said that the economy ‘grew nothing’ in 2022. How do you analyze this statement?

The average growth rate of the Gross Domestic Product (GDP) of emerging countries in 2022 was 3.7%, while the Brazilian economy stood at 2.9%.

Brazil’s inflation (the worst factor for the poorest in any economy) in 2022 was 5.8%.

Is this good or bad? I think it is a great number.

Sweden had inflation of 11.7%, the US 6.4%, the UK 10.1%, Argentina 98.8%, Chile 12.3%, and Turkey 55.2%.

The growth measures of the Brazilian economy left us a little below the average of the emerging economies. At the same time, our inflationary control taught the developed and emerging countries a real lesson.

What do you think about this idea of the post office replacing Uber?

An unfortunate speech [from Minister Luiz Marinho] that I can only believe was meant to cause surprise in the market.

Does the choice of Haddad indicate that Lula wanted someone he could control in the Finance Ministry, or do you believe he can have his voice in the job?

I don’t believe he will have his voice.

The PT needed a moderate name (especially in speech and gestures) at the Finance Ministry to calm the markets.

In politics, appearing to be is often better than being.

Is there any threat to the concession contracts carried out by the Bolsonaro government – ports, roads – to be restructured? Is there a path for this? How is it done?

There is no path for this, and I also don’t believe there will be any kind of intervention by any power over the private initiative to break the signed contracts.

Do you believe in the perspective of economic growth for this year?

I believe not. We will stay between 0% and 0.75%, which will be made up of the inertia of the growth of the previous years.

Already for 2024, we can see negative GDP.

With information from Revista Oeste