The Bovespa Index, the Sao Paulo stock exchange, hit a record high for the third consecutive day on Tuesday on the news that Brazil’s GDP had increased by 1.2 percent in the first quarter of 2021 — a particularly stunning achievement given the severity of the Chinese coronavirus outbreak in the country.
President Jair Bolsonaro, a conservative, has regularly opposed coronavirus measures like business lockdowns that have negative effects on the economy. Bolsonaro has referred to the Chinese coronavirus, which he personally survived last year, as a “little cold” and urged Brazilians to “confront it like a man, not a boy.” He has also organized mass events, outraging global public health authorities, encouraging Brazilians to support local businesses and strive for normalcy.
As Brazil’s government is a federal system, however, Bolsonaro does not have the power to prevent regional governors from imposing lockdowns. The governors of Rio de Janeiro, Minas Gerais, and Sao Paulo — the most populous states — have done so, leading to pessimistic predictions for Brazil’s economy in 2021.
As of Tuesday, Brazil has documented 16.6 million cases of Chinese coronavirus and 465,199 deaths, more than any state except India and the United States. These numbers consider only official government tallies, meaning the death and case counts of rogue states like China, Russia, and Iran are likely unrepresentative of the true toll.
Brazil’s GDP increased by 1.2 percent in the first fiscal quarter of 2021 compared to the quarter preceding it, according to the Brazilian Institute of Geography and Statistics (IBGE). The GDP increased by one percent with the same quarter year-on-year, outperforming the initial phase of the Chinese coronavirus pandemic in 2020. The IBGE noted that much of the growth came from Brazil’s farming and cattle sectors which, taken together, saw a 5.7-percent growth in production year-on-year the last quarter. The industrial sector marked a modest 0.7-percent increase, while services — among the sectors most damaged by coronavirus lockdowns, grew 0.4 percent.
Experts anticipated modest growth, or even shrinking, of the nation’s GDP given the ongoing status of the pandemic. IBGE officials applauded the growth as “far higher than expected” and noted that Bolsonaro’s government did not offer any free stimulus government to the public in the last quarter, opting instead for actively encouraging normal commerce.
“Even with the second wave of [Chinese coronavirus], the GDP grew in the first quarter since, compared to last year, there were not so many restrictions that impeded the function of economic activities in the country,” Rebeca Palis, the coordinator of the IBGE’s national accounts, said Tuesday.
The Agence France-Presse (AFP) deemed the GDP growth to mean that Brazil’s economy has returned to pre-pandemic size and may even grow beyond recovering from the dramatic 4.1-percent drop in GDP that occurred in 2020.
The Sao Paulo stock exchange hit 128,267 points at closing on Tuesday, its highest-ever value. Tuesday was the third consecutive day the Bovespa Index, the largest in the country, broke records; it first hit a record high on Friday at 125,561 on the heels of positive growth at the state-run oil company Petrobras.
On Monday, the second record-setting day for the Bovespa Index, Brazil received the good news from the FIFA regional affiliate CONMEBOL that it would relocate its Copa América, postponed from last year in response to the coronavirus pandemic, to Brazil from Argentina. The socialist government of Argentina, which received international praise for its allegedly successful pandemic policies, lost hosting duties due to a rapid rise in cases and nationwide lockdown order. Colombia, which had initially agreed to co-host the tournament, bowed out due to a wave of left-wing mob riots.
The Brazilian newspaper O Globo reported Tuesday that, while public health experts continue to express pessimism in Brazil’s pandemic trajectory, economists have begun to remodel their expectations for the second quarter of the 2021 fiscal year. Goldman Sachs issued a report following the high GDP growth rate improving their forecast for Brazil’s GDP in the second quarter from 4.6 percent to 5.5 percent growth.
“We regret the deaths but, despite everything, Brazil is doing well,” Bolsonaro said Teusday, responding to the GDP report. “Thanks to the federal government because, if it were up to many governors, everyone would be at home, all commerce halted, millions of jobs destroyed.”