Brazil should take two years or more to recover economy, study points out

A survey carried out by Kantar data consultancy pointed out that Brazil should take two years or more to return the economy to pre-pandemic levels. The result is part of the Consumer Insights study, carried out during the last quarter of 2021 with the countries of Latin America.

The company has separated other nations on the continent into two groups, according to the expectation of economic recovery for each one of them. Chile is the only Latin American country that, in 2021, recovered its GDP per capita at pre-pandemic levels.

Ecuador, Mexico and the countries of Central America, where economies are more dollarized, showed results of a possible recovery now in 2022. Argentina, Brazil, Colombia and Peru are expected to reach pre-pandemic levels from 2023 onwards.

According to the study, inflation is among the main factors that make it difficult for economies to recover. Besides it, unemployment also appears as an obstacle to the recovery.

Inflation

Among the economies identified by the survey with the highest inflation rates, Brazil ranks second, with an average of 10%, behind Argentina, which ended the year with an average rate of 48%.

The rise in prices mainly impacts items in the basic basket. According to the consultancy, most of the expenses of Latin American families are spent with them, compromising up to 35% of the income of the lower social classes.

In this way, the volume of consumption by families is affected. Brazil ended the year with a 1.2% lower consumer volume. Despite an improvement in comparison with the third quarter (-3.5%), the country occupies the second place among the biggest reductions, behind Argentina, which registered a decrease of 9.7%.

Unemployment

The survey shows that Latin America accounts for around 33 million unemployed, the highest result since 1990.

Looking at the countries that pushed the index the most, Colombia and Brazil appear in first place. Next are Argentina, Peru and Chile.