Christmas 2020 will be with high food prices and unemployment

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posted on 28/09/2020 06:00 / updated on 28/09/2020 06:09


(credit: ABR)

Consumers can prepare for a bitter end of the year, with the prices of Christmas dinner items more salty, experts warn. Unemployment is expected to continue growing and, with the reduction of the amount of emergency aid in half – from R $ 600 to R $ 300 -, many families will need to choose what to put on the table in the celebrations, opting for souvenirs and substitutions of imported products.

The period of retail orders has started and, according to economists, there is an arm wrestling with the industry, which insists on passing on costs to the price list, mainly, given the surge in the dollar, which makes imported items more expensive. on the holiday table.

Experts point out that, as the government has not given strong signs that it will be able to get out of the crisis, keeping the promise that it will be fiscally responsible, distrust grows. The reflection of this hits the dollar, which closed Friday at R $ 5.56, accumulating an increase of 3.3% in just one week. Official inflation has been escalating since June, driven by rising food prices, despite the fact that the Central Bank says it is calm about the famine.

In wholesale, the picture is even more worrying and there is no doubt that the readjustments will be passed on to retailers later on, damaging the Christmas of millions of Brazilians. According to data from Fundação Getulio Vargas (FGV), the Broad Producer Price Index (IPA) increased by 6% in the 30 days ended on September 10, and has already accumulated a 25.52% increase in 12 months, Argentine inflation pattern , which should hit consumers’ pockets at some point, analysts bet

And, to make matters worse, the job market should not show signs of recovery anytime soon. Analysts expect that unemployment will increase at the end of the year, especially since, with the easing of confinement, people start to leave home in search of work. “There will be no vacancies at the same pace as the number of people who start looking for jobs. As the service sector should take a long time to show a greater recovery, the temporary jobs common at this time of the year should not appear in significant numbers ”, warns the chief economist of the National Trade Confederation (CNC), Carlos Thadeu de Freitas Gomes.

The former director of the Central Bank believes that the pace of economic recovery will be slow. For Gomes, there are great chances that the unemployment rate will be above 15% this year, a level that was not seen in the recession between 2015 and 2016. “People are without a job, and those who are looking for (job) are not finding it” , scores.

Sergio Vale, chief economist at MB Associados, admits that the unemployment rate close to 17%, predicted by consultancy MB for 2021, may occur this year, because the number of people working formally is shrinking. In this account, it is necessary to consider the large number of companies that must close throughout the year due to the recession caused by covid-19. According to data from the Brazilian Institute of Geography and Statistics (IBGE), the number of employed people registered a record drop and hovers around 82 million people.

“If we consider the current data of the economically active population, the number of unemployed, of almost 13 million, already represents an unemployment rate close to 16%, but official bodies include those who are not looking for jobs in the calculation base, distorting the data” , highlights Vale. He recalls that each percentage point more in the unemployment rate is just over 1 million unemployed people in the country.

Although the Central Bank shows exaggerated optimism in relation to official inflation measured by the Broad Consumer Price Index (IPCA), which this year, due to the new methodology, reduced the weight of food at home in the calculation base, the chief economist CNC recalls that food prices will continue to rise – especially the traditional Christmas products, which are mostly imported and should incorporate the high dollar.

With the increasing famine, the Brazilian purchasing power is decreasing, and, in addition, unemployment is a problem for families at the end of this year, because, even in commerce, the demand for temporary labor will be lower than than in previous years, according to Gomes. “Christmas will be very weak and, if the dollar remains high, imported items should be replaced or reduced. It is the Christmas of the quarantine, and everything indicates that we will not have a great Christmas. If it is weak, it will be good already ”, he laments.

Economist Alexandre Espirito Santo has no doubt that there will be a lot of substitution of imported products at the Christmas dinner table in 2020 due to the high price of food. “People are unsure about the end of the year. Christmas will be conditioned to the discovery of the vaccine. If this happens until November, as the governor of São Paulo, João Doria, signaled, it may be a good thing, because there will be a psychological effect of people celebrating. But, if that doesn’t happen, consumption and the economy won’t be able to recover so easily ”, he highlights. “At home, as there are many people in the risk group, the celebration will be less. But, certainly, cod will not be lacking, even if the dollar continues at this level of R $ 5.50 and R $ 5.60. If the coin is more expensive by then, the amount will be less, at least, to make the cookie. ”

Tradition

This is what the businesswoman Francisca Moreira, 48, plans to do, given the food shortages in supermarkets. “The Christmas dinner will be with the family at home, and it will be simpler and with fewer portions. We will have to review the priority of the gifts and buy something that we need. It is not just a whim, but a matter of saving ”, he explains. Student Ananda Almeida, 23, has no doubt that, this year, the celebrations will be different, with a reduction in Christmas dinner items and gifts. “I believe that the idea of ​​a family together and a full house is no longer a reality at this moment. Thus, buying such an expensive item, such as turkey, for few people to eat, may not be a good idea. But, in general, I think that, precisely because the number of people has decreased, some traditions can be maintained at an affordable price ”, he evaluates.

“For me, the meaning counts more than the price itself. So, probably, this year’s gifts will be cheaper due to the crisis we are experiencing, with many people unemployed. Christmas is more than expensive gifts ”, believes Ananda.

* Intern under the supervision of Andreia Castro

Slower recovery

Economic activity should not show signs of such a strong recovery, according to analysts, who admit they do not see a resumption in V, as Economy Minister Paulo Guedes insists on predicting. According to estimates by Carlos Thadeu de Freitas Gomes, chief economist of the National Trade Confederation (CNC), the Brazilian economy will take eight quarters to return to pre-pandemic levels.

Sergio Vale, from MB Associados, believes that, due to a slower recovery this year and the next, the Gross Domestic Product (GDP) will not be able to grow more than 2.2% in 2021, a rate well below the high of 3.9% that the Central Bank expects for 2021, after revising the 2020 GDP retraction forecast from 6.4% to 5%. Vale recently revised the 5.3% to 4.8% GDP drop estimate this year.

Analysts also point out that, since the pace of recovery will be slow, offers in the job market will not be enough for the army of people looking for temporary jobs.

No Warranty
Rodolpho Tobler, an economist at the Brazilian Institute of Economics (Ibre), of the Fundação Getulio Vargas (FGV), points out that, although some recent indicators show a stronger recovery in retail, there is no guarantee that this speed will be sustainable until the end of the year. end of the year. “There is a lot of uncertainty, here and in the foreign market, especially due to the new wave of contagion in Europe, where some countries are returning to declare a lockdown”, he points out.

He recalls that the issue of financial uncertainty for families must also contain consumption in the last months of the year. “We know that the R $ 600 of emergency aid mitigated the impact of the crisis on the lives of many people who were unable to work, and this helped to boost trade in the middle of the pandemic. The problem is that, with the reduction of the value to R $ 300, the recovery data of the trade should not continue in the same proportion ”, emphasizes Tobler.

FGV predicts a 5.3% decline in GDP this year and is relatively optimistic about the job market, as it predicts unemployment reaching 13.6% at the end of the year. (HR)

“With the reduction of the value (of the emergency aid) to R $ 300, the data of recovery of the trade should not continue”
Rodolpho Tobler, economist at the Brazilian Institute of Economics

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