2020/2021.
Some findings 2020.
v The root of the 2020 crisis was sanitary, our lack of planning and amateurism corroborated to a dramatic picture deteriorating the country’s economy.
v It was an atypical year, we stupidly faced the Covid-19 pandemic with open chest, without planning and we paid and will pay a high price.
v Our investors sought and seek short-term earnings due to distrust in the financial system. Thus, the DNA of Brazilians is in general lines of security, they are rentiers, which makes the management of public debt and the economy in general more complex. The Brazilians who can save in Brazil are few and due to social inequality, they concentrate 75% of the country’s wealth.
v The service sector has been subjected to an unprecedented stress, companies and businesses have closed down.
v The public services sector in Br has not suffered and does not suffer any wage restrictions, which is at least unfair.
v The industry suffered in the beginning and soon recovered in “V”, mainly the manufacturing industry. People at home, those who could, heated up the consumption of some goods such as computers, cell phones, construction material, electronics, etc.
v Agriculture was practically unharmed by the 2020 crisis.
v Commodities had their prices increased, signaling reflexes in the dollar. The high dollar for a country that needs a lot of imported inputs increases the cost of other goods in the short and medium term.
v Emergency aid was essential for the reduction in GDP to be alleviated, so people prevented from consuming services focused on consumer goods.
v The GDP forecast for 2020 pointed at the beginning of the pandemic to a negative percentage of 9%, ending the year with -4.1% strongly anchored in emergency aid. The emergency PEC approved on 03/11/2021 limited to 44 billion reais will impact the GDP of 2021 by + 0.6% (according to Mr. Felipe Salto).
v Interest rates in Brazil have never been at such low levels since the beginning of the historical series. This phenomenon was worldwide. A lot of money that existed and exists in the world has not found a safe place to park; it is estimated at around 13 trillion dollars the mass of resources looking for some positive profitability worldwide. In Brazil, real estate prices have risen by about 4% as many people have opted for this alternative. The SELIC rate at 2% per year and an inflation of 4.52% closed in 2020 means in practice negative interest rates, a bad application for those who leave their rich money in banks.
v The “bar fight” between our president and the governors SP left both scratched, this strategy was at least unwise.
v The informal sector suffered disproportionately as well as less qualified workers, there is a 3 to 1 ratio, that is, for every 3 jobs lost by unskilled workers, we have a loss of 1 job for the qualified worker. Those who do not specialize suffer much more, stay alert. Update yourself.
v The informal sector in Brazil has a productivity of about ¼ of the formal sector.
Some considerations for 2021:
v Yes, 2021 will be better compared to 2020, we just will not recover faster thanks to the naive mess of our leaders.
v The degree of uncertainty in the economy is very high, but we can – with bumps – rely on the vaccine, this is our asset. The vaccine exists, not in the quantity needed for countries in the periphery, so a theme should be placed on the agenda: Breaking Patents!
v Legal insecurity in the country alienates investors and generates great internal noise (Lava Jato, Vaza Jato, Saídas à Jato).
v Gross capital formation is at historic minimum levels, that is, something like 15.5% of GDP, of course, the country will not go anywhere with this level of investment in capital goods. The government did not understand that it needs to invest for the private economy to accompany it and not the other way around.
v The recovery abroad is slow, and by the table, it is no different here, we should close the 1st semester with negative GDP growth.
v Inflation expectations are growing and long-term SELIC rates are a good index for managers to have a “feeling” whether we are improving or not. Today they are very high, making infrastructure projects that require long-term rate stability unfeasible, for example. There are tools to reduce this slope in the interest rate curve, but it is necessary to know how to apply them and have the courage to do so.
v “Faria Lima” is a force that should not be overlooked, for neoliberals there is the argument that prices are rising, so it is necessary to increase interest rates! But, be careful, prices do not go up on demand, they go up because they are managed (fuel, energy) and many are strongly influenced by the dollar (food, fuel). This is an arm wrestling between BC – Central Bank versus Faria Lima. If interest rates rise, Faria Lima won. Unfortunately!
v Jobs will be scarce, the mass of unemployed could reach a horrible 16% of the workforce by the end of 2021.
v High interest rates in the USA will always pull resources there, after all, they are the largest or the second largest economy in the world. Thus, the resources of the emerging countries are drained there, aggravating the outflow of US dollars, and reducing investments here. The United States is expected to have vigorous growth in 2021, but it has demonstrated since 2008 that it has learned to pour money into the market without inflation or domestic interest rates rising, to check. This is a lesson that we still don’t know how to apply in Br.
v The populism of the current government in no way corroborates us to sell a serene image abroad, we have a team on the plateau that plays for the audience and does not score, a team that prefers to appear in the media rather than really build solid solutions.
v The Brazilian middle class is being introduced to the noun scarcity, scarce condition, lack of a good or service that fulfilled its previous need, faces deprivation, examines losses of quality of life and experiences a drop in the social scale to the poverty level. The middle class is eagerly joining the queue for emergency government assistance, a handout donated for lack of more consistent policies.
Solution:
# Vacinajá
#crescimentoeconomico
#foconaindustriacompetitiva
#geracaodeemprego
Will Br return to normal after vaccination of 100% of its population?
Make your bets!
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