Economic crisis has some Brazilians engaging in underground businesses

Global Business

Economic crisis has some Brazilians engaging in underground businesses

Brazil’s economic crisis has taken a big hit on its industries and has led to massive layoffs over the last two years. The financial despair has led many Brazilians to engage in underground businesses. And that is fueling informal finance in the country.

CGTN’s Paulo Cabral reports.

Economic crisis has some Brazilians engaging in underground businesses

Economic crisis has some Brazilians engaging in underground businesses

Brazil’s economic crisis has taken a big hit on its industries and has led to massive layoffs over the last two years. The financial despair has led many Brazilians to engage in underground businesses. And that is fueling informal finance in the country. CGTN’s Paulo Cabral reports.
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Last year, Ediio Moreira had a formal job as deliveries driver for a food industry. But with the crisis, he lost it and after many unsuccessful job applications he resorted to street selling.

There’s no official data on the number of street sellers but some working here say newcomers have been arriving as unemployment grows in the country. According to the government, over 1.3 million formal jobs have been lost since 2016.

It was the case of Francisco Ferreira’s job as a truck driver. For the last three months, he’s been making Popsicle’s at home and selling them on the streets, to feed his family.

Responding to the crises, many people are finding ways to make a living in the underground economy. According to a recent survey, the share of the informal economy in Brazil’s GDP increased over the last two years, after dropping for more than a decade.

In 2003, the underground economy represented 21 percent of the country’s GDP but went steadily down to 16.1 percent in 2014. The trend then changed to rise to 16.3 percent in 2016.

There’s hope but not certainty among economists that the Brazilian economy may start picking up by the second half of this year. For some of these street sellers, it would be a chance to get back to their lost formal jobs.