Brazil shed as many as 169,131 jobs in October, as Latin America’s biggest economy slips deeper into recession amidst tumultuous political debate over corruption scandals. With each month passing, more jobs are being lost, according to data released by the Labor Ministry.
That’s because businesses across the country laid off 95,602 people in September, with the construction and services sector taking the hit. Each of these sectors shed nearly 50,000 workers in October.
Job loss in the construction sector is certainly a matter of concern, because a huge number of infrastructure programs are underway in major cities across the country. In June, President Dilma Rousseff announced the second stage of a so-called program of investment in logistics, offering long-term incentives to the private sector in the road, rail, air and ports sectors.
Brazil’s economy is forecast to shrink 3 per cent this year and just over 1 per cent in 2016, according to a central bank survey. Deepening economic crisis has already cost nearly 1.4 million jobs in the past 12 months. Worse still, many workers are living with the fear of losing their jobs.
In the past few months, the South American country has repeatedly raised interest rates in a desperate attempt to push down inflation. But the measure seems to have pushed up the borrowing cost for businesses, many of whom have now resorted to trimming staff to stay afloat.
Weakening demand for commodity in the global market and a political stalemate in Congress are currently fueling the crisis. Until around 2012, easy availability of jobs and higher wages were the main drivers of reductions in poverty and income inequality. There are no latest data about poverty alleviation.
The World Bank has recently urged Brazil to focus on raising labor productivity to generate more jobs.