Emergency Aid Creates Consumption Bubble in Brazil's North and Northeast

Benefit sparks heterogeneous recovery in sectoral and regional terms

Rio de Janeiro

Recent data from the Brazilian economy show that the country's recovery is mixed among regions and economic sectors. The emergency aid is showing an outsized effect on the recovery of the North and Northeast.

After the relaxation of social isolation measures, the R$600 (US$ 116) benefit inflated the economy of these regions amid the pandemic.

CRATEÚS/ CEARÁ / BRASIL - Benefit sparks heterogeneous recovery in sectoral and regional terms ( Foto: Karime Xavier / Folhapress) . - Folhapress

In 15 of the 16 states, trade has exploded and has already surpassed the pre-quarantine level.

According to experts interviewed by Folha, aid heated up the growth of retail, which increased in August in the sectors of fabrics, clothing, and footwear, articles for personal and domestic use, furniture, and appliances.

According to the IBGE (Brazilian Institute of Geography and Statistics), the sales growth is due to the extra R$ 600 income. The service sector, on the other hand, still hasn't returned to pre-crisis levels.

The reduction of aid to R$ 300 (US$ 53) will negatively affect this growth. The unemployment rate will remain high in these places.

Translated by Kiratiana Freelon

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