Responding To Covid-19 In Brazil

This was first published on April 13, 2020.


Around the world lockdown measures have been put in place to flatten the Covid-19 contagion curve and alleviate impact on health systems. The side effect, however, has been a profound and unprecedent negative impact in the real economy.

The solutions adopted by governments and central banks in the last global economic crisis will not necessarily be fit for today’s scenario; given its different nature and transmission channels. Brazil, for example, in response to the 2008 crisis incentivized demand (e.g. by cutting sales tax), which is not applicable in a situation where the population has limited ability to consume.

In this research report we offer our perspectives on short and potential medium term effects of Covid-19 to Brazil – stock markets fell ~40% in only four weeks; local supply chain is likely to be impacted not only by Brazil-enacted containment measures but also from cascade effect of measures adopted by key global trade partners, such as China and the US.

Finally, we also review and outline the main types of strategic and tactical responses adopted by companies in Brazil and provide our perspectives on the fiscal and monetary measures put in place by the Brazilian government.

Responding To Covid-19 In Brazil