ADVERTISING

Latest Photo Galleries

Signs of Tension Signs of Tension

Published on 04/11/2016

Rio: a City in Metamorphosis Rio: a City in Metamorphosis

Published on 11/19/2015

Brazilian Markets

17h30

Bovespa

+0,32% 128.106

16h43

Gold

0,00% 117

17h00

Dollar

+0,68% 5,0140

16h30

Euro

+0,49% 2,65250

ADVERTISING

Informal Sector Employment Becomes Obstacle for Brazil's GDP in 2018

03/26/2018 - 11h12

Advertising

FLAVIA LIMA
FROM SÃO PAULO

The rise in informal sector jobs in Brazil's labor market has become an obstacle when it comes to getting the economy back on track. The trend may lead to lower-than-expected economic growth in 2018.

Last year, all 1.8 million jobs created belonged to the informal sector. The average income of workers without work permits, sometimes referred to as workers who are "on their own", is half the income of formal sector workers.

Analysts have revised Brazil's growth from 3% to 2.5% for 2018, a change that was justified by the formal labor market's lack of strength and the fact that household consumption corresponds to 65% of the country's GDP.

Consumption in the country reached its peak between 2011 and 2014, when the percentage of formal sector jobs was at its highest: 45%. The percentage has since declined to 42%.

Marcelo Gazzano, an analyst at consulting firm AC Pastore, pointed out that the lifting of restrictions concerning R$ 44 billion (US$ 13.3 billion) in inactive FGTS accounts (Employment Time Guarantee Fund) may very well have helped fuel the economy. "It's not that there won't be a recovery. There will, it just won't be as robust as the recovery we had anticipated".

Translated by THOMAS MATHEWSON

Read the article in the original language

You have been successfully subscribed. Thanks!

Close

Are you interested in news from Brazil?

Subscribe to our English language newsletter, delivered to your inbox every working day, and keep up-to-date with the most important news from Brazil.

Cancel