RIO DE JANEIRO: Brazil’s sickly economy got an unexpected glimmer of good news Wednesday with unemployment figures showing a slight dip to 13.6 percent rather than yet another record rise.
It was the first fall in unemployment figures since 2014 and came amid expectations that Latin America’s biggest economy is finally emerging from its worst recession in history.
The IBGE state statistics office said that 14 million people were out of work in the February-April period, or 13.6 percent of the workforce. While still a huge number, the announcement at least put a stop to what had been a relentless series of increases.
With the previous rate at 13.7 percent, with 14.2 million unemployed, economists had been bracing for another hike to 13.9 percent, according to a forecast from Gradual Investimentos.
The marginally better situation will boost President Michel Temer’s attempt to stay in office despite a raging corruption scandal.
The conservative leader faces multiple calls for his resignation and a probe in the Supreme Court that could see him stripped of office over charges of obstruction justice and corruption.
Temer is attempting to rally political support, saying that his program of restoring fiscal responsibility to Brazil and implementing austerity measures is helping to end a two-year recession — the deepest in the country’s history.
On Thursday, gross domestic product figures are due out and analysts expect them to show the economy is finally growing again, after eight consecutive quarters of shrinkage.
Later Wednesday, the Central Bank was expected to announce it is cutting its key Selic rate again.
With inflation falling steadily, the Selic has already been slashed from 14.25 percent in October to 11.25 percent last month.
Until a couple of weeks ago the market consensus was for a 1.25 percentage points cut to the Selic, but in Valor financial daily’s survey of 41 experts, 35 now forecast a one percentage point reduction.
