As a consequence of the economic uncertainties, added to the confrontation between Russia and Ukraine, Brazil is expected to register a stagnation in the labor market, with a weak recovery in employment in 2022.
And the deterioration of the indicators can be intensified, depending on the duration of the war in Eastern Europe.
This is the Brazilian economic scenario prospected by a survey by the Fundação Getúlio Vargas (FGV) and also by a projection by the consultancy IDados, based on the National Continuous Household Sample Survey of the Brazilian Institute of Geography and Statistics (IBGE).
The IDados report highlights that the unemployment rate should remain stable throughout the year, with a drop of 0.1 percentage point compared to that observed in December 2021.
“Economic activity in the country is being greatly impacted by high inflation, which in turn forced the federal government to raise interest rates. This is all very difficult for Brazilian businessmen, as they cannot take out low-cost loans, for example, and foster the economy,” said IDados researcher Tiago Cabral.
“The result of all this is that businessmen fail to hire the number of employees they intended”, he explained.
The consultancy’s projection on Brazil’s Gross Domestic Product (GDP), based on data from the federal government’s Focus Bulletin, is also not promising.
to CNNeconomist Tiago Cabral pointed out that the country’s production of wealth should only grow 0.3% in 2022.
“There are several channels of impact of the war in Brazil, directly and indirectly. Commodities do not stop rising because of conflicts, for example. Consequently, the price for the country’s domestic consumer increases and this leads to lower consumption, that is, an economic downturn,” he said.
“Another channel of damage to the country is the embargo on Russian oil, which already generates high prices for the input. We need to remember that a large part of our economy depends on road modes, which need fuel”, concluded the economist.
The FGV Antecedente Employment Indicator, released this week, points out that hiring expectations in Brazil dropped 1.4 points in February, maintaining the downward trend of the last four months — impacted by the Ômicron variant of Covid-19.
In this way, the index has the worst level since August 2020, the height of the first wave of contamination by the virus.
In addition, the expectation of hiring Brazilian businessmen may drop even further in the coming months, according to Rodolpho Tobler, economist at the Brazilian Institute of Economics at FGV (FGV Ibre).
The expert points out that the war in Eastern Europe causes economic uncertainties in all countries.
“The indicator fell again in February, following the negative trend of recent months. The latest results suggest that the recovery of the labor market should be slower than in 2021. The difficult macroeconomic environment and potential risks of increased global uncertainty do not allow for a change in the indicator’s trajectory in the short term”, declared Tobler. .
The economist also detailed the Brazilian economic sectors that will be most affected by the war in Ukraine.
“The impact will be seen in several sectors, such as commerce and services. But the industry, due to difficulties in obtaining input, high prices impacted by the rise in fuel, may be the negative highlight,” he said.
Brazil ended 2021 with 12 million unemployed people, according to the IBGE. As a percentage, the unemployment rate in the country is 11.1%.
Source: CNN Brasil

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