Economic crisis? What economic crisis?

While worldwide governments design and implement financial stimulus packages, President Lula mainly limits himself to stimulate the Brazilians to continue spending money and to buy goods to support the Brazilian industry. In Brazil apparently payment of the 13th month is seen as stimulus package to rescue the economy and beat the financial crisis. In the month of December, the Brazilian economy will be “enriched”, with approximately BRL 78 billion (25 billion euros) due to the payment of the 13th month.

This amount represents about 2.7% of the gross domestic product (GDP), and includes workers in the formal sector, including domestic servants, pensioners and beneficiaries with a state pension.

According to calculations of Dieese (Department of Statistics and Socio-Economic Studies), the BRL 78 billion will be paid to about 68 million people. Dieese didn’t take into account the self-employed and informal workers, who may also receive a kind of compensation at the end of the year, but whose details are impossible to obtain.

According to Dieese the national average paid will be BRL 1,105 (€ 354). The 13th month for Previdência (something like a general old age pension scheme) is BRR 753 (€ 241). Workers in the formal market receive BRL 1,331 (€ 427), while household staff is entitled to an average of BRL 495 (€ 158).

Beneficiaries in the capital Brasilia go home with the biggest share (taking into account all categories) i.e. BRL 2,378 (€ 762), while beneficiaries in the federal state of Piauí have to be content with BRL 662 (€ 212).

According to a survey, the vast majority of consumers (60%) plans to use the 13th month to settle debts, an increase of 3,45% compared with the previous year. According to the study conducted by Anefac during the month of October 2008, among 573 consumers from all social classes, the number of consumers that plans to use the 13th month for the purchase of gifts decreased from 20% to 15%.

In 2008, only a small number of consumers (2%) will set that money aside for the expected costs in the first month of next year. However, according to research from Anefac, the number of consumers who drew a loan in anticipation of the release of the 13th month grew with 28,57%. This quota represents 9% of the total national entitlement to the 13th month payment.

Although (thanks to the idle words of President Lula) the Brazilians believe that Brazil will be little affected by the international financial crisis, the majority of the population reviews the outlook for 2009 negative in terms of inflation, unemployment and personal income. According to a poll by Ibope commissioned by the National Confederation of Industry (CNI), the Justify Fullmajority of the Brazilian population believes that the inflation will rise, however they think the international financial crisis has reached the country, they do noy expect to be affected personally by the unrest, which started in the US market.

According to the CNI/Ibope survey the number of respondents that expect an increased unemployment rate in 2009 stepped up from 40% to 63%, while the number who expect a job increase in 2009 fell from 55% to 35%.
The expectation of people about their income also declined, albeit with lesser intensity. 38% think they have an increase next year, compared with 41% who believe that their income will not change and 13% who believe in a deterioration.

But despite all the fine words of Lula Christmas dinner became significantly more expensive.

Less than a week before Christmas, the demand for food for the traditional Christmas dinner increased substantially. With the high dollar, which made a leap from BRL 1,60 in October to BRL 2,30 in December, and the rise of inflation in the last three months, everything is more expensive, especially imported products such as fruits and vegetables. And clothing prices rose to unprecedented heights while the Brazilian traditionally needs to wear new ones for Christmas.

An analyzes of Dieese shows that products such as turkey, chester ham and cod, in this time of year very popular products, showed a price increase compared with the same period last year.
One of the most consumed products at a Christmas dinner, the frozen chicken is the only one which remained stable. A kilo costs an average of BRL 3,94 (€ 1,26).

In addition to these increases of traditional products, Christmas dinner this year will also be affected by higher prices of fruit. Some increased with more than 30%, such as the chestnut. The fresh plum increased by 31%. The Argentine apple 36% and imported pear increased by 50%. The largest increase however was for dark seedless raisins, with a peak of 67%.

The Christmas shopping did not provide significant results, although retailers are still optimistic. The expectation in Belém is a higher turnover of 10% over the previous year, although during the first two weeks of December, few shoppers could be found.
Finally on Christmas Eve the total results were not disappointing. Striking was that consumers bought and paid with cash, quite unusual in this time of the year when normally credit card companies celebrate their highest output. But with a current interest rate on your credit card of 175% annually you have to disregard that option.

Merry Christmas

Cartoon courtesy J. Bosco/O Liberal