Coronavirus hits Brazilian economy, senior politicians diagnosed

SAO PAULO/RIO DE JANEIRO (Reuters) – The new coronavirus outbreak hammered Brazilian retail, transportation and manufacturing on Wednesday, as the epidemic spread to senior political leaders and shook financial markets.

Senate President Davi Alcolumbre said on social media that had been diagnosed with the virus but had no severe symptoms.

President Jair Bolsonaro said a second Cabinet member, Mines and Energy Minister Bento Albuquerque, 61, has tested positive for the virus, joining his National Security Advisor Augusto Heleno, 72, who was quarantined at home with no symptoms.

Bolsonaro said he had tested negative twice, but 14 people in his entourage to Florida 10 days ago have tested positive.

With criticism mounting of his lax handling of the crisis, Bolsonaro held an afternoon news conference with ministers – all wearing masks – to announce emergency measures to contain the virus and buttress the economy, including assistance for poorer families and support for a struggling aviation industry.

Financial markets were rattled by the fast-spreading virus that causes the COVID-19 respiratory disease.

The benchmark Bovespa stock index closed 10% lower, bond yields spiked and Brazil’s currency hit an all-time low of 5.2 per dollar before central bank measures in foreign exchange and bond markets helped to pare losses.

After markets closed, the central bank cut its benchmark interest rate to an all-time low of 3.75% and pledged “to deploy its arsenal of monetary, exchange rate and financial stability policies to fight the current crisis.”

In a fresh blow to many retail stocks, Sao Paulo Governor Joao Doria on Wednesday recommended the closure of shopping malls in the metro area of the country’s biggest city. Several mall operators had already announced reduced shopping hours.

Sao Paulo city hall also ordered commercial establishments closed to the public from Friday until April 5, with exceptions for deliveries, pharmacies, gas stations, supermarkets and food service.

Airline association ABEAR said the sudden halt in travel was the worst crisis ever faced by Brazil’s aviation sector. Demand for domestic flights in the second half of March fell 50% and international bookings were 85% down, ABEAR said.

Related Coverage

  • Head of Brazil's Senate tests positive for coronavirus – statement
  • Loud protests ring out in Brazil over Bolsonaro's coronavirus response

Economy Minister Paulo Guedes said airlines’ debt would be renegotiated.

General Motors Co, the best-selling carmaker in Brazil, announced it would furlough all workers starting on March 30, suggesting production in the automaking sector could soon fall off sharply.


Bolsonaro said Brazil was considering closing all its land borders, following a decree closing its border to Venezuelans, citing contagion risks and strains on the public health system.

The decree, published on Wednesday, does not apply to trucks shipping goods or cross-border humanitarian aid previously authorized by health officials. The 15-day ban on Venezuelans entering Brazil could be extended, it added.

Bolsonaro, a right-wing populist who has antagonized Venezuela’s socialist President Nicolas Maduro, said on Twitter on Wednesday that the border closure was a result of “the incapacity of the dictatorial Venezuelan regime to respond to the COVID-19 epidemic.”

In another restriction of border traffic, land transport regulator ANTT suspended for 60 days all international bus services.

Seven cities neighboring Sao Paulo, Brazil’s biggest metropolis, said they would begin reducing municipal transportation until a total shutdown from March 29 onward.

Late on Tuesday, Bolsonaro asked Congress to authorize a state of emergency through the end of the year, freeing the government from spending targets as it mobilizes funds to fight the virus and bolster the economy. Officials proposed nearly 150 billion reais ($29 billion) of measures on Monday.

Brazil this week reported its first fatality from COVID-19. Confirmed coronavirus cases more than doubled over the past three days to 291 on Tuesday, according to the Health Ministry.

That count could soar past 2,300 and as high as 5,000 by March 26, researchers at three Brazilian universities said in a study.

Major cities have called off large gatherings, suspended school and leisure activities and encouraged work from home.

But critics said Bolsonaro played down the gravity of the situation and failed to encourage social distancing from the start. On Sunday, he cheered on public demonstrations and took selfies with supporters who staged a rally outside the presidential palace.

Brazilians who were upset with the president’s handling of the crisis banged pots and pans and shouted “Out with Bolsonaro” from their windows on Tuesday evening in Sao Paulo, Rio de Janeiro and other big cities, in a spontaneous protest.

Source: Read Full Article