The average salary hadn’t been this low in a decade. Homeless people set up tent villages on the sidewalks of wealthy neighborhoods in São Paulo. At the end of this year, per capita income (GDP) will still be lower than in 2010 (two thousand and ten: no typo). There is still no known political project that presents a credible plan to deal with the chronic problems of growth (“reforms”, with or without quotation marks).
It is the worst crisis of the Republic.
That said, if the conversation shifts to the very short term and deals with the political-electoral environment, it is a fact that the economy did not sink further, as the opposition expected. Five months before the election, some goats even leave the room.
There are better numbers in employment, in consumer and business confidence, in credit. Government revenue is the highest since 2014 (as a proportion of GDP), which facilitates electoral favors.
Consider the case of employment. On Friday (29), the IBGE released the figures for March. The unemployment rate is the lowest since 2016. The occupancy level is the highest since 2017 (the percentage of people of working age who had a job).
The number of people with some work is the highest since 2012. It is 8.2 million higher than in March 2021 or 2.2 million higher than in March 2019.
Average labor income (“wages”) is a disaster. Discounting inflation, it has never been so low since 2012, when the new series of data on IBGE work begins. Even so, it has grown a little bit from the bottom of the well since January — it gets worse.
The mood of businessmen in civil construction, services and industry is still of “dissatisfaction”, of pessimism, but confidence grew in April, according to the FGV survey, recovering from the collapse seen from mid-2021. trade, still fell. Consumer confidence, although at a level of deep dissatisfaction, also recovered somewhat.
The rise in interest rates, the prospect of growth of less than 1% of GDP this year and the fall in the value of real wages did not significantly discourage bank credit.
The annualized pace of the value of credit grants (new loans) was accelerating at least until February, the most recent data (discounting inflation). Yes, a deceleration is visible in the quarterly data (in real terms, seasonally adjusted).
The stock of credit (total money borrowed) also grows, in annual terms.
A hasty reading of these examples may give the impression that the economy is rising from the grave. Not. We still crawl on the cold floor of the crypt. The suggestion here is to interpret the situation in a more political way and with the realism that the carnivalesque and crazy opposition tends to despise.
Note again: 8.2 million people found work in one year (increase of 9.4%). The average salary has dropped, but many people had no income a year ago. The drop in income, by the way, was greater for the category of civil servants. The share of formal jobs is practically the same as in 2019 or 2018.
In addition to this minimally worsened situation, the government steroids the very short-term economic climate. It released the partial withdrawal of the FGTS, renegotiates debts from Simples and Fies companies (student financing), opened payroll loans to more people, lowered a tax here and there. It makes more debt, it’s true, making the 2023 situation worse.
Interest rates are on the rise. Inflation will remain above 10% per year until August or September. Stumbling in the US and China portend trouble here. For now, however, fewer goats in the room help Jair Bolsonaro.
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