Study: Brazil expected to take two or more years to recover its economy

RIO DE JANEIRO, BRAZIL – A survey conducted by Kantar data consulting pointed out that Brazil should take two years or more to get its economy back to pre-pandemic levels. The result is part of the Consumer Insights study, conducted during the last quarter of 2021 with Latin American countries.

The company divided other nations of the continent into two groups, according to each one’s expectation of economic recovery. Chile is the only Latin American country that has recovered its per capita GDP to pre-pandemic levels in 2021.

Ecuador, Mexico, and Central American countries, where economies are more dollarized, have shown results of a possible recovery in 2022. Argentina, Brazil, Colombia, and Peru are expected to reach pre-pandemic levels from 2023.

According to the study, inflation is among the main factors hindering the recovery of economies. In addition, unemployment also appears as an obstacle to recovery.

INFLATION

Among the economies identified by the survey with the highest inflation rates, Brazil appears in second place, with an average of 10%, behind Argentina, which closed the year with an average rate of 48%.

The rise in prices impacts mainly the basic food basket items. According to the consultancy, most Latin American household spending is on these items, compromising up to 35% of the income of lower social classes.

Thus, the consumption volume of families is affected. Brazil closed the year with a consumer volume 1.2% lower. Despite an improvement compared to the third quarter (-3.5%), the country ranks second among the largest declines, behind Argentina, which recorded a 9.7% retreat.

UNEMPLOYMENT

The survey shows that Latin America has around 33 million unemployed, the highest result since 1990.

Looking at countries that pushed up the index, Colombia and Brazil come in first place. Next are Argentina, Peru and Chile.