The Brazilian Institute of Geography and Statistics (IBGE) recently reported a notable decrease in unemployment.
As of July 2024, the unemployment rate dropped to 6.8%. This rate represents about 7.4 million people and is the lowest since January 2015.
Compared to the previous quarter, unemployment fell by 0.7 percentage points. It also dropped by 1.1 percentage points, or approximately 1.1 million people, from the same period last year.
The employment scene has also improved significantly. A record 102 million people were employed during this quarter. This figure is up by 1.2 million from the last quarter and 2.7 million from the previous year.
The employment rate rose to 57.9%. This is an increase of 0.6 percentage points from the previous quarter.
It also marks the highest employment level for this quarter since 2014, signaling a strengthening job market.
Average earnings have shown positive growth. They averaged 3,206 reais (about $565), up by 4.8% from last year.
This increase in earnings has boosted household consumption. As a result, there is higher demand for goods and services. This, in turn, creates more jobs.
The rate of informal employment stood at 38.7%. This equates to 39.4 million people and has remained steady compared to both the previous quarter and last year.
Success Comes at a Price
As of July 2024, Brazil confronts a severe fiscal dilemma with a public accounts deficit that reached 10.02% of its Gross Domestic Product (GDP) in the 12 months through July.
This alarming figure, released by the Central Bank, overshadows the financial prudence seen in many nations and casts significant concerns over Brazil’s economic stability and growth prospects.
Understanding Brazil’s fiscal severity becomes clearer through comparison with other countries.
For instance, the European Union and the Euro Area project government deficit-to-GDP ratios at around 3.0% for 2024.
Italy, on the other hand, recorded a deficit of 7.4% of GDP in 2023, marking it as one of the highest in the EU.
In contrast, the United States forecasts deficits near 5.3% through 2030, while Mexico anticipates a 5.4% deficit.
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