Brazil's GDP Returns to Pre-Covid Levels, but Earnings Don't Reach the Poor

Surprisingly, the 1.2% advance in the 1st quarter doesn't apply to industries that employ a lot of people

São Paulo and Rio de Janeiro

The Brazilian economy surprised analysts and returned to the level it was in the fourth quarter of 2019, before being hit by the Covid pandemic, according to GDP (Gross Domestic Product) data released on Tuesday (1) by the IBGE (Brazilian Institute) of Geography and Statistics).

The growth in the first three months of the year reached 1.2% compared to the previous quarter, but it was not the same between the different sectors.

People who depend on less skilled jobs, especially in the informal market, did not benefit from this improvement.

The service sector, which employs the most, grew 0.4% and, in it, the group of activities that includes food and leisure (among others) and accounts for one in three positions in the country. It is still 9.5% below the pre-Covid levels.

For economists, the increase in the indexes does not reflect the weakness in the labor market.

Economic activity has not yet recovered the peak recorded in early 2014, and growth has slowed down compared to the last quarter of 2020.

Even so, the numbers encouraged the markets, which predicted an increase of 0.8%. In comparison with the first quarter of 2020, the increase was 1%.

Translated by Kiratiana Freelon

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