International Online Medical Council (IOMC)

Corona Virus Impact In Brazil

As the coronavirus (COVID-19) incidence advances in Brazil, economic fallout and major impacts are expected in different consumer goods and services industries. This comes not long after industries were showing signs of recovery following the country’s economic crisis in 2014-2018. Euromonitor International forecasts another year of negative real GDP growth for Brazil in 2020. While we foresee some categories benefiting from spikes in short-term demand, most industries foresee major negative impacts on sales in 2020. This is especially true in services industries, where consumption occasions that did not take place due to the lockdown cannot be made up in future consumption events. Regardless of the industry, however, important common denominators should drive consumer behaviour in Brazil over the next few months. According to Euromonitor International’s Macro Model, the impact of COVID-19 on our baseline forecast for Brazilian real GDP will lead to a decline of 1.0% in 2020, while the impact of a COVID-19 Deep Recession would lead to a similar downturn to that seen during the crisis of 2014-2018. If a COVID-19 Crisis scenario consolidates, however, unemployment rates and real GDP growth will be significantly worse than in 2016 (the worst year of the crisis), leading the Brazilian market to generally collapse. The Latin American outlook will be subject to further downgrade revisions if COVID-19 outbreaks worsen. As the COVID-19 outbreak intensifies in Brazil, consumers are returning to “crisis mode”, copying many habits acquired during the economic crisis of 2014-2018. This means prioritisation of essential items, especially due to concerns about unemployment. Bottled water and coffee are set to see the greatest rises in demand in the short term, especially through larger pack sizes, as these are considered essential items for most Brazilians, who are looking for the most affordable unit prices. In the case of bottled water, bulk sales are expected to offset volume declines seen in the last couple of years, while intermediary packs (5-8 litres) should continue to grow in volume terms.