Synthesis of the Brazilian Economy

BRAZIL ECONOMICS - Report 29 Nov 2021 by Affonso Pastore, Cristina Pinotti and Paula Magalhães

​The recent discovery of a new Covid variant in Africa, called Omicron, has made hopes and plans for a more relaxed and festive holiday season uncertain. The large number of new mutations seems to indicate an increased dissemination pace, although there is no evidence yet of more severe symptoms. It will take a few weeks to find out whether the current vaccines are effective against Omicron, and whether its lethality is greater or lesser than the previously identified strains. It has already been detected in Europe, Asia and Oceania, triggering the closing of borders and the return of stricter rules for the entry of tourists. The huge difference in the immunization rate of rich countries (54% having received at least one dose) and poor ones (5.7%), tends to favor the emergence of new mutations, jeopardizing the efforts undertaken so far to dominate the virus. Past Sunday it was published that there is already a case of this new variant in Brazil, although the number of deaths remains stable. The relaxation of rules for the holiday season might have to be revised in face of the new threat.
On the economic front, the rising inflation is accompanied by economic deceleration, aggravating the labor market situation and penalizing people with low incomes the most. Insensitive to the foreboding climate, lawmakers are now focusing their efforts on (avidly) defending the existence of a “secret budget”, showing total disdain for the constitutional rules on transparency of public spending and search for the common good.

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