Brazil, São Paulo Faces Economic Reopening Quandary

On 28 May, the mayor of the Brazilian city of São Paulo Bruno Covas outlined the requirements for businesses to begin a “calm and gradual” reopening as per a state-wide plan announced the previous day, while stressing that the coronavirus (Covid-19) “pandemic has not passed” and social distancing measures should continue to be observed.
Brazil São Paulo Faces Economic coronavirus

Analysis:

After more than two months of lockdown measures, on 27 May the governor of São Paulo state João Doria announced a plan for their phasing out across the state from 1 June. Adherence to lockdown measures has been falling, hovering at around 50% for weeks (the target is 55% and the ideal level would be 70%), and economic pressure is growing. But yesterday, São Paulo city’s intensive care units were at 92% capacity and the state, the epicentre of the coronavirus outbreak in Brazil, saw its biggest daily increase in cases. This reinforces concerns that the lifting of lockdown comes before the infection curve has been brought under control, as suggested by Covas’ caution.  

  • São Paulo state recorded 6,382 new Covid-19 cases yesterday, bringing the total to 95,865 cases (of which 6,980 deaths). Nationally, the official count of Covid-19 cases stands at 438,236 of which 26,754 deaths (yesterday saw a record daily increase in case counts at national level also).
  • The state-wide reopening plan has been described by Doria as a “conscious recovery”, with five phases to be implemented gradually at local level across São Paulo’s 17 regions.
  • The city of São Paulo is classified as being in ‘phase 2’, which allows the controlled reopening of shopping centres, shops, the real estate market and concessionaires. Covas, however, stressed that activity will not resume on 1 June, but that business associations will be able to submit their reopening protocols for approval by the municipal authorities from this date.
Looking Ahead:

Three regions, including Greater São Paulo and the Baixada Santista coastal area, are in ‘phase 1’ which means their economic activity will remain limited to essential businesses until their Covid-19 indicators improve. Covas warned that São Paulo city could be forced to backtrack from gradual reopening if the situation worsens in the state capital.

In brief: Unemployment on the rise in Brazil

* Brazil’s national statistics institute (Ibge) has released the latest figures on unemployment which show the unemployment rate rose to 12.6% in the quarter ending in April. This is up 1.3 percentage points from 11.3% unemployment in the previous rolling quarter (November 2019-January 2020) and compares with 12.5% unemployment in February-April 2019. The unemployed population has increased by 7.5% (898,000 people) on the previous quarter to 12.8m, while the employed population fell by 5.4% (4.9m people) quarter-on-quarter, and 3.4% (3.1m) year-on-year, both the biggest decreases on record. The decline in employment reflects the effects of the coronavirus (Covid-19) pandemic, the Ibge says, noting that it has affected both the formal and informal sectors.

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