End of emergency aid will lead one third of the country to poverty
In an optimistic scenario, the equivalent of half the population of Venezuela, will live on less than R $ 522.50 per month.
In a scenario considered optimistic, Brazil will increase the total number of people considered poor by about 16 million when the emergency aid paid to the most vulnerable ends, at the end of 2020.
Equivalent to half the population of Venezuela, this contingent of “new poor” will expand to almost a third the Brazilians who will live on less than R $ 522.50 a month, on average. The amount represents less than half a minimum wage and about $ 3 a day.
The payment of emergency aid during the coronavirus pandemic to more than 65 million Brazilians has unprecedentedly and abruptly reduced poverty in the country, bringing it to its lowest level.
The end of the benefit will have the opposite effect – and quickly. The interruption of payments will increase the total number of poor from 23.6% (50.1 million people) to around 31% (66.2 million).
In this more optimistic hypothesis, considered very unlikely, Brazil would return, in terms of poverty, to the same level as before the pandemic, according to projections by FGV Social based on the microdata of PnadC (National Survey by Sample of Households Continuous) and PNAD Covid , from IBGE.
The scenario does not seem feasible for two main reasons: during the pandemic, it was the most precarious jobs, especially in the service sector, which suffered the most because of social isolation; and the income of the poorest had already been the most affected.
In the second quarter of this year, which fully took the effects of social isolation and economic paralysis, the average income of Brazilians fell by 20%. But that of the poorest 50% has plummeted 28%.
When emergency aid began to be implemented in April, millions of Brazilians had a sudden increase in income, which caused the poverty rate to fall rapidly.