By Marcela Ayres and Lisandra Paraguassu
BRASILIA (Reuters) – Brazil’s president and economy minister warned on Thursday that Latin America’s largest economy is on the verge of collapse, underlining the government’s controversial view that the fallout from social distancing measures could be worse than the novel coronavirus itself.
Speaking to reporters after meeting with Supreme Court justices, Economy Minister Paulo Guedes warned that business leaders are telling him there is a danger production will seize up and there will be a lack of food on the shelves within 30 days. Emergency subsidies the government is providing the poor, he added, will soon dry up.
“Everything is still organized. But businesspeople are saying the following: ‘There’s a danger things will start to get disorganized,'” he said.
Speaking to reporters after the same meeting, President Jair Bolsonaro said some states went too far in their social distancing measures, and that steps must be taken as soon as possible to bring the economy out of “intensive care.”
Their comments come as the coronavirus crisis intensifies in Brazil, which has registered 125,218 confirmed cases and 8,536 deaths. New deaths hit 615 on Wednesday, a second consecutive daily record, and hospitals are overwhelmed in some states.
Meanwhile, financial institutions polled by Brazil’s central bank predict the economy will shrink 3.8% this year, and non-governmental organizations say more and more families are skipping meals as incomes dry up.
Many state governments have bristled at the federal government’s laissez-faire attitude toward the virus, and most have shut non-essential businesses and services. Some erstwhile allies have split with Bolsonaro over his economy-first message.
Authorities in the northern states of Maranhao, Para and Ceara declared full lockdowns in certain areas this week, though the measures appear to have been only lightly enforced.
During his comments to reporters, Guedes also repeated a call for public sector workers to forgo salary increases for two years, and said he has asked Bolsonaro to veto sections of a bill offering aid to local authorities that allow for such raises.
Bolsonaro said he fully supported Guedes regarding the matter.
(Reporting by Marcela Ayres and Lisandra Paraguassu; Writing by Gram Slattery; Editing by Daniel Wallis)
