Three interrelated factors will determine the pace of Brazilian recovery in the coming months: the speed of vaccination, the possible third wave of Covid and the relationship between epidemic severity and mobility and activity.
In the pace of vaccination, there is good news, as evidenced by a certain “competition” between states and cities to speed up schedules. In the past seven days, the daily rate of vaccines (first and second doses) has been approximately 1.3 million.
Regarding the possibility of a third wave outbreak, doubts remain over whether the country will move towards a new collapse of the hospital system, as happened in March and April. What is already clear is that the improvement, both in terms of cases and deaths, that occurred after the peak of the second wave, has already stalled and even reversed.
In June, in particular, there is a clear downtrend. From the start of the month to date, the seven-day daily moving average of new cases increased from 61,500 to 73,600; and new deaths, from 1881 to 2061.
Threats loom, such as the so-called “delta variant” of the coronavirus, which originated in India, has already reached Brazil, and which may be the most widespread strain of all.
According to the World Health Organization (WHO), the delta — which has already wreaked havoc in countries such as India, the United Kingdom, Russia and Indonesia and threatens the United States — could become the world’s most active alternative.
Finally, on the third fact front – epidemic severity/mobility/activity -, Latest post by economist Lucas Farina, from FGV Ibre and MCM Consulting on Blog do Ibre, shows how activity has resumed in the second wave even with very low traffic.
In the case of Brazil, from March to mid-April last year, Google’s mobility indicators for “retail and entertainment” and public transit stations fell by between 60% and 70%. In the case of the workplace index, the regression ranged between 40% and 50%.
Then, from April to December 2020, mobility indicators gradually returned to normal, but they decreased again with the second wave this year, although it is lower than the first.
But what caught Farina’s attention was the fact that the reaction of activity to the decline in movement in the second wave – which, although smaller than in the first wave, was significant – was very small and almost marginal.
The measure of economic activity used by the researcher was the Concurrent Economic Composite Index (CEI), from FGV Ibre-Conference Board.
“Although the first [onda] Having had a very large impact on activity, as evidenced by the CEI level recorded in April 2020, this was not the case for the second case, as the economy has adapted relatively well to this ‘new normal’, preventing activity, Farina writes, from The economist will suffer a new expressionist effect as the epidemic resurfaces
In his analysis in the article Indicators of mobility and simultaneous indicators of economic activity in some developed countries, the economist also found approximately the same pattern of difference between the two waves, although the intensity differed from one country to another.
In short, the new wave of the epidemic, although (at least in Brazil) is killing more, reducing circulation, and even this restriction has had a relatively smaller negative impact on activity.
The interrelationships between the three factors mentioned earlier in this column are clear. A third, stronger wave could slow the economy, but faster vaccinations could contain it.
And curbing this final third wave on activity may be weaker, as from the first to the second, not only lower movement, but the effect of lower movement on the economy is relatively less.
Fernando Dantas is a Broadcast columnist ([email protected])
This column was published on Broadcast on 6/21/2020 on Monday.
