On the way to a lost year? The first numbers of the pandemic in Latin America
In the past two weeks (as highlighted by this newsletter), the figures for two key economic indicators have begun to come out in the main economies in Latin America–GDP and unemployment–, and with it, the first real impacts of the COVID-19 pandemic can be read.
Between February and March, the unemployment in Brazil increased from 11.6% to 12.2%, according to the Pnad (the continuous household sample survey carried out by the Brazilian Institute of Geography and Statistics, IBGE). The survey has "moving quarters" as a time parameter, thus, the rate of 12.2% refers to the period from January to March, while that of 11.6%, to the three months between December and February.
The first case of COVID-19 in the country, and in Latin America, was confirmed on February 26th, and the quarantine decrees in States like Rio and São Paulo started to come out in the second half of March, which means that the numbers of March already bring the impacts of the pandemic. April's figures are behind, and the IBGE does not guarantee that this time the survey will be finished. As in March, IBGE is struggling to collect information over the phone and achieve the statistical quality necessary for the research.
In the absence of April's numbers, it is possible to look at another side of the labor market, the formal one. According to the Ministry of Economy, unemployment insurance claims in April reached 748,484 (22.1% more than in April last year), and 2,337,081 claims between January and April 2020 (a number 1.3% higher than to one from the previous year).
In Mexico, the National Institute of Geography and Statistics (Inegi) reported an unemployment rate of 2.9% in the first quarter of the year, a lower rate than the one from March 2020 (3.2%). But, as in Brazil, experts say that the true figure was likely higher than reported due to restrictions on data collection amid tougher measures to prevent the spread of the coronavirus.
In Colombia, the unemployment rate reached 12.6%, according to the National Department of Statistics (DANE), 1.8 percentage points higher than at the same time last year, and the highest unemployment indicator in the last decade.
In Chile, according to the Institute of Statistics (INE), the first quarter ended with an 8.2% unemployment rate, just a little bit higher than the 7.2% rate of the first three months of 2019, but an important change in the country as stable as Chile.
Another subtle effect, typical of the region's labor market, already appears in the unemployment statistics, at least in Brazil and Mexico: the unemployment rate would be higher if people had not already given up looking for a job.
Methodologically, only those who are part of the country's workforce and say they are looking for a job are considered unemployed. In both countries many are the people who have already given up on looking for formal jobs.
Brazil, for instance, had 4.770 million people in this situation in the quarter ended in March, according to IBGE data, which means 150,000 more than in the quarter ended in December 2019. In comparison with March 2019, 73,000 more people.
The way out for these people is informal activities, which generate an almost daily income, as in the photo below, from a street fair in the Mexican city of Zapopan (Image: Francisco J Ramos Gallego/Shutterstock).