The effects of the new coronavirus pandemic and restrictions on the functioning of various economic activities could lead to a crisis resulting in losses of more than R$ 320 billion to the Brazilian economy.
This will cause 6.5 million workers to lose their jobs, according to a study commissioned by the National Confederation of Services (CNS).
According to the vice-president of the CNS, Luigi Nese, the significant numbers should not be used to make a fuss. Although or to be opposed to strategies recommended by health authorities to contain the spread of the disease.
President Jair Bolsonaro entered into a collision course with governors and health experts, however, when defending that workers return to the streets so that the economy does not suffer such a huge impact from the pandemic.
Crisis according to WHO
The World Health Organization (WHO), however, defends isolation for everyone as the only way to prevent the spread of the disease. Although in a state of sustained transmission, that is, when the origin of the contamination is not known
“The aim of the study is to show what a 60 to 90 day shutdown can cause to the economy. We ordered the data to prepare employers, workers, government and justice for a debate that leads us to a post-crisis solution.
Regardless of a shorter or longer term in facing the Covid-19, we need to join forces so that the economy recovers after this process”, he states.
The services sector should be the most penalized, with the loss of around R$ 117 billion in revenue. Therefore, if the impacts of Covid-19 on the economy last for a period of 60 to 90 days.
The study, obtained exclusively by Estadão/Broadcast, also points out that commerce will lose almost R$ 80 billion and the manufacturing industry will no longer earn around R$ 66 billion. The new coronavirus pandemic would still bring losses to civil construction (around R$ 20 billion) and agriculture (almost R$ 12 billion).
As a result, the prospects are for 2.2 million layoffs in the services sector, 2 million job losses in commerce, 1 million jobs lost in industry, and 637,000 fewer jobs in construction.
The study also shows that, with less production and employment, Covid-19 could reduce federal revenue by almost R$ 125 billion this year.
Given the billion-dollar loss estimated in the study, Nese assesses that the measures already announced by the government will be. Therefore, they are insufficient to prevent the closure of small and medium-sized companies and the loss of jobs.
Provisional Measure 927
“The government announced measures to inject more resources into the market, but the dose of aid will probably have to be increased”, he projected.
“The first thing to guarantee employment during and after the crisis is to relieve the payroll – immediately, without discussions. We have this opportunity to implement this, even through a proposal on taxation on electronic transactions”, he adds, returning to defending the recreation of a tax along the lines of the old CPMF.
The executive also criticized the clumsy way in which Provisional Measure 927, which suspended contracts and salaries for up to four months, was released at the beginning of this week. Bolsonaro had to retreat from this point in the MP hours after its publication.
“This MP was a mess. What has to be strengthened is the employment contract, emphasizing that what is agreed is worth more than what is legislated.
Changes to vacations and working hours have typically been made in collective agreements for many years. Suspending salaries was a bad idea, which would have further reduced demand during the crisis,” he adds.
Immune
If the scenario is dire for almost all sectors of the economy, the study shows that the segments of information technology, public and private health and public services, on the contrary, must maintain or increase income and jobs. Companies in the health and social assistance sector alone are expected to see an increase of almost R$ 7 billion in revenue in 2020.
“Some sectors will grow at the expense of others. As they are strategic services at this time of crisis, professionals in this area will, on average, be in more intense demand with an increase in workload. But they will also be impacted if the crisis lasts for a long time”, says Nese. “Information technology will improve processes, facilitate sales and remote activities, but if employees in these areas are unable to get to work, this sector will also stop”, he concludes.
