What an Olympic Boxer Selling Pizzas Says About Brazil’s Economy

When Brazilian Olympic medal winner Esquiva Falcao rang in the new year, he was focused on his goal of preparing for an international boxing championship.

But as the coronavirus spread and forced establishments including sports venues to close, the career athlete turned to his wife’s pizza business to make a living. Together they are now facing a reeling economy with a simple publicity strategy: order a pizza, and have it personally delivered to your front door by a middleweight star.

“Whoever buys a lot can take a picture of me and my silver medal,” Falcao said in an interview. “If I don’t fight, then I can’t make money.”

Falcao is one of the millions of citizens hit by Brazil’s sudden economic downturn. Gross domestic product shrank by 1.5% in the first quarter, according to a government release on Friday. Still, the data only captures the initial impact of the coronavirus pandemic, which has ruined high expectations of a breakthrough in growth following years of disappointment.

“We are talking about economic depression in Brazil; that is the reality,” said Monica de Bolle, a Senior Fellow at the Peterson Institute for International Economics in Washington. “The economic collapse is going to happen. We are seeing widespread impoverishment of the population.”

Brazil has the second-highest number of confirmed virus cases in the world, and the peak of the local outbreak is weeks away. Still, its impact on Latin America’s largest economy is already taking on historic proportions.


The broadest measure of retail sales posted its biggest drop ever in March, while industrial production tumbled to levels not seen since 2003, government data showed. The following month, Brazil shed a record number of formal jobs as consumer confidence plunged to an all-time low.

BRAZIL REACT: Three Bad Signals From the April Labor Report

Consultancy Siegen expects a record number of bankruptcies in the second half of the year, and sectors from ethanol to airlines are already lining up for government aid. Almost 80% of Azul SA’s crew members are on unpaid leave and the company is still burning as much as 4 million reais ($736,000) per day, according to the transcript of the company’s May 14 earnings call.

A study published by Fundacao Getulio Vargas, a top business school, found that 53.5% of families have had their income reduced by the pandemic, and almost half have had to stop working due to social isolation measures. Brasilia-based real estate agent Bruno Mello, whose business is down 70%, counts himself among those who have been affected.

“Most people are now only working on commissions and not salaries,“ Mello said. “I try to keep the personal visits as safe as possible, with protective masks and hand sanitizer. Even with those precautions, business has dropped sharply.”

President Jair Bolsonaro’s administration has responded to the pandemic by granting stipends to informal workers and loosening some labor rules though a program that’s protected over 8 million jobs, according to government estimates. Meanwhile, the central bank has lowered its interest rate to a record and freed up billions of dollars for credit.

Political Tensions

Still, much-needed stimulus is limited by a debt load that is expected to reach at least 90% of GDP this year, Treasury Secretary Mansueto Almeida said this month. The nation’s woes are also being exacerbated by Bolsonaro’s bungled response to the pandemic, as well as political scandals involving his administration.

In recent weeks, Bolsonaro has hardened criticism of social distancing measures implemented by state governors, going as far as appearing at political rallies and mingling with supporters. In doing so, he’s brushed off the fact that the virus is now ravaging poor parts of the country as far-flung as the Amazon rainforest.

At the same time, political spats and growing odds of an institutional crisis with the nation’s judiciary are distracting from efforts to help the economy.

Officials are continuing investigations into whether or not Bolsonaro illegally interfered in police operations. In a dramatic development, the Supreme Court this week ordered a probe into some of the president’s allies over the alleged spread of fake news, in addition to a another inquiry into political foe Wilson Witzel over supposed embezzlement of funds.

Read more: Fake News Probe Fuels Crisis Between Bolsonaro and Top Court

The press office of Brazil’s presidency declined to comment on this article.

Going forward, Bolsonaro will need both political and investor trust – as well as a healthy population – to restart growth. Brazil’s central bank signaled this month that an erratic recovery will likely start as early as the third quarter, but, for many economists, that outlook may be too rosy.

“The government may have implemented some important emergency measures, but they are not enough and the fiscal situation doesn’t allow much more,” said Banco Inter chief economist Rafaela Vitoria. “The drop in demand caused by the pandemic is out of control.”

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Coronavirus Spreads Into Parts of Brazil Without ICUs or Clean Water

As Brazil’s accelerating caseload propels it into the second worst coronavirus hotspot, one of the most alarming aspects is the epidemic’s path — spreading into areas so poor they lack not only intensive care units but often clean water.

Restricted at first to Brazil’s rich neighborhoods and capitals in close contact with international travelers, the virus has migrated inland, and also to states like Maranhao, where 20% of the population live in extreme poverty and most workers have unregulated jobs.

“There are places where people don’t have soap and water to wash their hands,” the state’s health secretary, Carlos Lula, said in an interview. “How can we talk to them about wearing masks and teach coughing and sneezing etiquette?”

Ever since mid-March when Covid-19 was declared a pandemic, global health officials have feared that a country with limited infrastructure, crowded dwellings and poor health facilities could explode with illness and overwhelm its systems. Brazil may be that country.

20,634 in U.S.Most new cases today

-13% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23

-1.​078 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23

-4.​8% Global GDP Tracker (annualized), April

Trails Only U.S.

A sprawling land of 210 million inhabitants and Latin America’s largest economy, Brazil has, in the past week, overtaken Spain, Italy, the U.K. and Russia in number of cases, nearly 375,000 with more than 23,000 deaths. It trails only the U.S. in confirmed infections.

One of the country’s poorest states, Ceara, now has almost as many cases as Rio de Janeiro with less than half its population. In Pernambuco, where the governor is sick, the daily average of deaths has doubled to 90.

Lula, the Maranhao health secretary, says the state has 388 ICU beds, 230 of which are in the capital. One recent day, he said, there were 916 new cases, only 200 of them in the capital.

Mayor Arthur Virgilio of Manaus, the capital of Amazonas state, said the pandemic has shown how unprepared Brazil’s heath system is.

Home Deaths

Manaus, with some 2 million inhabitants, was one of the first cities where hospitals were overwhelmed by Covid-19. Pictures of mass graves and bodies lying next to patients flooded the Internet. Since many couldn’t get into hospitals and others feared they couldn’t, there was a surge in deaths at home.

A month ago, the city saw as many as 167 fatalities in a day. It is down to a third of that, but as the disease spreads to smaller towns nearby, the numbers could jump again. Manaus is the only city in Amazonas which has intensive care units. If patients flow in from the hinterland, the health system could be driven again to its knees.

All of this is happening as Brazil’s president, Jair Bolsonaro, continues to stand out for his belittling of the pandemic’s significance. He has appeared at political rallies and mingled with supporters while health experts say the central tool for limiting the virus’ spread is maintaining distance from others.

“We have to fight not only the virus, but the president,” Mayor Virgilio said. He called Bolsonaro “an accomplice” to the deaths in Brazil.

Brazil is a federal system and governors and mayors have established their own quarantine rules. But the president has pushed to get people back to work and criticized governors for increasing restrictions and implementing lockdowns, often saying more will starve from the looming recession than die from the disease he has dubbed “just a flu.”

The divergence between federal and local governments has led to open conflicts between Bolsonaro and governors -- not only in the Northeast, where the relationship with the president was already fraught, but also with some former allies including the governors of Rio de Janeiro and Sao Paulo, who have implemented social isolation measures.

As in most countries, the meaning and reliability of virus data are under intense debate. The high numbers in Ceara state -- 36,185 cases and 2,493 deaths -- can partially be explained by a push to increase testing, said Magda Almeida, the state’s secretary of health surveillance. The state has done 20,867 tests so far, while the country has done about 415,000.

A scientific committee put together by the Northeastern states is recommending seven cities declare lockdowns as hospitals run out of room. Cities from Belem to Sao Luis have already done so, implementing some of the harshest measures in the country. The committee also noted that coronavirus is not the only disease to worry about: dengue cases are also growing.


Bahia, one of the top tourist destinations in the Northeast, has made some progress. Health Secretary Fabio Vilas-Boas says new cases are growing at 6% a day, half the pace from before. But even there, it has been difficult to lower the numbers because the virus has reached poor neighborhoods, where people live in smaller spaces.

In Sao Paulo, the country’s richest state and the virus epicenter since the pandemic began, the disease is also moving away from the capital city. In April, infection rates outside of the capital were three to four times higher than in Sao Paulo and kept rising this month, according to government data. Almost 80% of the cities in the state now have cases, from less than 50% in late April.

“Unfortunately, the numbers are confirming what we had been saying since March,” Sao Paulo’s state secretary for regional development Marco Vignoli said at a press conference last week. “Now we’re seeing an acceleration in the state’s countryside and on the coast.”

— With assistance by Mario Sergio Lima

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Brazil Tops Russia, Japan Success Puzzles Experts: Virus Update

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Brazil added a record number of cases, overtaking Russia as the nation with the world’s highest number of coronavirus cases after the U.S.

In the U.S., President Donald Trump declared houses of worship as essential and directed governors to let them open “right now,” even though legal experts said he lacks the authority to override stay-at-home orders. The CDC warned though that singing can speed transmission and recommended against sharing items like collection plates.

Anthony Fauci, the U.S.’s top infectious disease expert, said it may be time to consider a cautious reopening of the economy. Oxford University and AstraZeneca started recruiting for advanced human studies of one of the fastest-moving experimental vaccines, while a Russian institute said it used laboratory staff in a successful unofficial test on a potential vaccine.

25,294 in U.S.Most new cases today

-14% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23

-1.​073 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23

-4.​8% Global GDP Tracker (annualized), April

The World Health Organization said the virus has spread now to every country in Africa, where cases have topped 100,000.

Key Developments:

  • Virus Tracker: Cases top 5.1 million; deaths around 335,000
  • Here’s what your cruises will look like after Covid-19
  • We need a name for the greatest economic crisis this century

Subscribe to a daily update on the virus from Bloomberg’s Prognosis team here. Click VRUS on the terminal for news and data on the coronavirus. For a look back at this week’s top stories from QuickTake, click here.

Japan’s Success in Managing Outbreak Puzzles Experts (7:20 a.m. HK)

Japan’s state of emergency is nearing its end with new cases of the coronavirus dwindling to mere dozens. It got there despite largely ignoring the default playbook.

No restrictions were placed on residents’ movements, and businesses from restaurants to hairdressers stayed open. And even as nations were exhorted to “test, test, test,” Japan has tested just 0.2% of its population -- one of the lowest rates among developed countries. Yet the curve has been flattened, with deaths well below 1,000, by far the fewest among the G7 nations. While the possibility of a more severe second wave is ever-present, Japan is set to leave its emergency in just weeks, and likely to exit completely as early as Monday.

Gilead’s Remdesivir Helped Only Those on Oxygen, Study Says (7 p.m. HK)

Gilead Sciences Inc.’s remdesivir, which was authorized to treat Covid-19 in adults and children who need supplemental oxygen, a ventilator or extracorporeal membrane oxygenation (ECMO), only significantly helped those on supplemental oxygen, not the latter two types, a pivotal study published in the New England Journal of Medicine found.

Brazil Overtakes Russia as Second-Most Infected Nation (6:28 p.m. NY)

Brazil added 20,803 cases, bringing the total to 330,890 -- topping Russia’s 326,448 infections. The number of deaths increased by 1,001 to 21,048. That’s still behind some of the most-affected countries in Europe including the U.K., Italy and Spain, along with the U.S..

With the worst-performing stock market and currency globally this year, Latin America’s largest economy no longer seems like a bargain for investors, as a bungled response to the pandemic turned the country into the world’s fastest-growing virus hotspot.

U.K. Police Question Johnson Aide (5:37 p.m. NY)

Boris Johnson’s chief adviser was interviewed by police for potentially breaking the U.K. government’s lockdown rules when he self-isolated with coronavirus symptoms. Police spoke to Dominic Cummings after he was seen more than 250 miles (400 kilometers) from his London home shortly after he went into isolation at the end of March -- a time when the prime minister and Health Secretary Matt Hancock had both tested positive.

At the time, U.K. citizens were under orders not to travel, and to stay at home. Cummings, a divisive behind-the-scenes figure within the administration, lives in London while his parents live in Durham, in northern England. Earlier Friday, Home Secretary Priti Patel said passengers arriving in the U.K. will be forced into quarantine for two weeks and face fines of 1,000 pounds ($1,200) if they break the rules.

Peru Continues Reopening Economy (5:15 p.m. NY)

Peru authorized more businesses to reopen, including hairdressers, electricians and online clothes retailers along with mining, fishing and construction companies that were cleared to reopen this month. The lockdown, which was set to expire Sunday, will continue through June 30, President Martin Vizcarra said.

Peru is battling South America’s biggest coronavirus outbreak after Brazil, with total cases surpassing 100,000 this week. Strict lockdown measures in place since mid-March have taken a heavy toll on the economy, with economic activity slumping 16% in March and more than a million jobs lost in Lima in the three months to April.

CDC Cites Choirs, Collection Plate in Guidance (4:15 p.m. NY)

Religious groups should consider suspending or limiting choirs or singing during services and avoid passing a collection plate, the U.S. Centers for Disease Control and Prevention said in guidance issued hours after Trump demanded governors immediately open houses of worship. “The act of singing may contribute to transmission of Covid-19, possibly through emission of aerosols,” the CDC warned.

Churches should stay in contact with local and state officials as reopening decisions are made, and provide protection for staff or congregants who are at higher risk of infection. The guidance encouraged hand washing, use of face coverings and increased cleaning and disinfection measures.

U.S. Cases Increase 1.8% (4 p.m. NY)

Coronavirus cases in the U.S. increased 1.8% as compared to the same time yesterday to 1.59 million, according to data collected by Johns Hopkins University and Bloomberg News. That’s above the 1.5% average of the past week. Deaths rose 1.7% to 95,490.

  • New York cases rose 0.5% to 358,154, in line with the average increase over the past seven days, according to the state’s health department.
  • Florida cases rose 1.6% to 49,451 on Friday, compared with an average increase of 1.7% in the previous seven days, according to data from the state’s health department. Deaths rose 2.1% to 2,190.
  • Cases in California rose 2.6% to 88,444 while deaths increased 2.5% to 3,630, according to the state’s website.

Cases Reach All African Nations: WHO (3:15 p.m. NY)

Every nation in Africa now has coronavirus cases, as the continent’s infection total exceeds 100,000, the World Health Organization said. The first Africa case was reported 14 weeks ago.

Africa’s mortality rate has been low, with 3,100 confirmed deaths. By comparison, when cases reached 100,000 in Europe, deaths topped 4,900, WHO said. Early analysis suggests the lower mortality rate may reflect that Africa is the youngest continent, with more than 60% of the population under age 25. In Europe nearly 95% of deaths occurred in those older than 60.

Italy’s Deaths, New Cases Remain Low (12:10 p.m. NY)

Italy’s new cases remained below 1,000 for a 10th day on Friday, as health authorities said the epidemic’s curve is consistently descending in all regions, including Lombardy, the hardest-hit area. Authorities reported 652 cases, up from 642 a day earlier, for a total of 228,658. Daily fatalities were 130, down from 156 on Thursday, bringing the death toll to 32,616.

China Vaccine Shows Promise: Lancet (11:20 a.m. NY)

An experimental vaccine developed by CanSino Biologics of China was safe and generated an immune response in an early study in humans. The vaccine stimulated production of both antibodies that can stop infection along with immune T-cells, according to a report Friday in The Lancet medical journal. Further research is needed to show its effectiveness against the virus. The study was funded by CanSino and conducted by researchers from the Beijing Institute of Biotechnology and other organizations.

“The challenges in the development of a Covid-19 vaccine are unprecedented, and the ability to trigger these immune responses does not necessarily indicate that the vaccine will protect humans from Covid-19,” Wei Chen, a professor at the Beijing institute that carried out the study, said in the report.

Russia Tests Covid-19 Vaccine on Researchers (8:10 a.m. NY)

A Russian government research institute said it conducted successful unofficial tests on a potential coronavirus vaccine. Laboratory staff who volunteered to receive the vaccine at the Gamaleya epidemiology institute in Moscow had no side effects and are healthy, said its director, Alexander Ginzburg, the state-run Tass news service reported. It didn’t state how many people took part in the trial.

— With assistance by Heather Smith, and Rachel Gamarski

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‘Little Flu’ Can’t Hurt Him: Why Bolsonaro Still Shuns Lockdowns

In this article

Throughout the coronavirus crisis that’s killed 35,000 people worldwide, Jair Bolsonaro has kept up face-to-face meetings and pushed everyday Brazilians to get back to work.

It’s no political calculation. In his gut, the president believes the bigger threat to Brazil is the economic fallout rather than the virus itself, according to two officials with knowledge of his thinking. On Sunday, he toured Brasilia, where he chatted with large groups while visiting shops, restaurants and street markets.

“Bolsonaro is a very intuitive man and that intuition got him elected,” said Sergio Olimpio Gomes, a high-level police officer turned Sao Paulo senator who’s been close to Bolsonaro for years. “He’s not concerned with being the outlier because that’s how he’s always lived.”

One reason underpinning Bolsonaro’s conviction: He’s been sitting at the center of a Covid-19 cluster for three weeks now and still feels just fine.

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“After being stabbed, no little flu is going to take me down,” said Bolsonaro, who was knifed on the campaign trail 1 1/2 years ago. On Sunday, after his Brasilia outing, he told reporters: “The virus is here. We’re going to have to face it — but face it like a f–king man.”

“We’re all going to die one day,” he added.

Cases Balloon

While the coronavirus was slow to take hold in Latin America’s largest economy, cases are now ballooning and health experts warn the Brazilian president may have wasted precious time in preparing. Many medical professionals — and even the health minister himself — agree the public health system would be pushed to collapse if infections track the explosion in other parts of the world. Official cases in Brazil almost doubled in four days to 4,256 as of Sunday, with deaths tripling to 136.

“Arguing to get schools up and running in a nation where kids and the elderly often live side by side is a huge risk,” said Vivian Avelino-Silva, an infectologist and researcher at Albert Einstein Hospital in Sao Paulo, which is ranked the best hospital in Latin America. “The fact that Bolsonaro doesn’t understand this, after weeks of crisis, is worrying.”

Both Bolsonaro and Economy Minister Paulo Guedes think Brazil would be better off if the virus were allowed to circulate among the healthy population, according to a person with direct knowledge of the matter. Both men instead advocate targeted quarantines that isolate high-risk groups. A request for comment from Bolsonaro’s press office wasn’t returned.

The 70-year-old Guedes has stuck close to his Rio de Janeiro apartment in recent weeks, before returning to Brasilia to work from one of Bolsonaro’s properties this week.

“If companies don’t produce, they don’t pay any salaries,” Bolsonaro tweeted last week. “If the economy collapses, workers in the service industries also won’t get paid. We need to reopen business and do everything we can to safe-guard the health of the elderly and ill.”

Goldman Sachs Group Inc. warned on Friday that Latin American economies are deteriorating faster than at any time in history. Brazil may be in for a 3.4% contraction, the firm said, down from a previous forecast of 2.2% growth.

Mingling With Supporters

Bolsonaro is living what he preaches. He still holds face-to-face and group meetings, often without masks. On Sunday, he went out to chat with folks while visiting shops and restaurants. Just his presence there caused large groups to form around him. After he tweeted a video of the outing, Twitter yanked the post for violating its rules.

All the while, Bolsonaro’s inner circle is a hotbed for infections. (The president himself has said he’s tested negative twice.)

First among government officials to test positive was Communications Secretary Fabio Wajngarten on March 12, two days after he returned from Florida, where he and Bolsonaro hob-knobbed with U.S. President Donald Trump at Mar-a-Lago. A day later came Bolsonaro’s lawyer, a senator and the ambassador to the U.S. By the end of the next week, 19 more Brazilians who had traveled to Miami and met with the president had fallen ill.

From there, the infection spread to Congress. At least seven lawmakers are sick, including Senate President Davi Alcolumbre. Fears of infection have emptied the usually crowded Parliament building, with senators and deputies now voting remotely. So far, none have shown serious symptoms.

Fifty Minutes of Cycling

Bolsonaro said he’s checked in on several sick officials, including 74-year-old Augusto Heleno. Brazil’s top security official has been mostly isolated since his positive test, except for a three-hour meeting at the President’s Palace on Thursday. “I asked him: ‘General, what are you feeling?’,” Bolsonaro recounted while streaming on social media last week. “And he says: ‘Nothing. I just did 50 minutes of cycling.’”

To be fair, Bolsonaro is hardly the only head of state pushing to get people back to work — and he could very well reverse his stance as other leaders have done. Mexican President Andres Manuel Lopez Obrador said over the weekend that people should shop in public markets to support small businesses. Donald Trump is also eager to reopen the economy, although he backtracked on a push to open by Easter, heeding the advice of U.S. government’s top doctors.

Read More: Bolsonaro, AMLO Roll the Dice With Laid-Back Virus Response

Bolsonaro has also taken steps to free up funds to fight the crisis and bolster the public heath care system. He declared the pandemic a calamity, which allows him to spend outside the federal budget, while also transferring cash to states, helping out airlines and giving vouchers to informal workers.

A High-Stakes Gamble

But by defying the advice of Health Minister Luiz Henrique Mandetta and other experts to pursue social distancing, Bolsonaro is making a high-stakes gamble that may be the defining moment in his presidency. Recent polls show Brazilians feel the health minister is handling the crisis better than the president.

Bolsonaro is also going head-to-head with state governors who ordered shops and schools closed to slow down the pandemic that threatens to overwhelm the health system. Sao Paulo state, the epicenter of the outbreak in Brazil so far, has implemented some of the strictest measures in the country.

“President Bolsonaro doesn’t identify with the political class in Brazil,” said Marco Feliciano, an evangelical pastor and deputy government leader in Congress who often travels with the head of state. “From there stems conflict.”

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