Market overview

Brazil is severely affected by Covid-19, with the second highest number of confirmed cases in the world, and the number of fatalities is growing daily. It is a growing epicentre for the virus. Hospital occupancy rates are increasing rapidly and there is growing concern around the health system’s ability to cope.

There are varying measures and restrictions in different states of Brazil. Despite the rising case numbers, Brazilian states are continuing with plans to gradually re-open businesses in June.

The country is also experiencing political turmoil at the highest level, with the President downplaying the impact of Covid-19 and disagreeing with social isolation measures put in place by state governments.

For more information on doing business in Brazil, visit myNZTE - our free online portal for curated, in-depth information and guidance. 

Economy and trade


Brazil’s agricultural exports have been performing very well of recent, going against the trend of bleaker trade and economic news. Brazil's beef, pork, soy, sugar, and coffee exports were higher in May compared to the same period last year, driven by additional purchases from China and the high level of the $USD against the $R. Brazilian soy and beef exports both grew by ove 21% in May (by volume).  Brazilian pork exports grew by 52%.


Most market commentators and institutions are in agreement that there will be a reduction in GDP in 2020, however, the estimated projected reductions in GDP vary from -4% to -8%. On 13 May, the Economic Policy Secretariat of the Ministry of Economy projected a 4.7% drop in the economy this year. In January, the ministry predicted a GDP growth of 2.4%. In March, the beginning of the crisis, the forecast was for stability (0.02%).

The World Bank has projected the economy will shrink by 8% in 2020. The Institute of Applied Economic Research (Ipea) revised its projection to a 6% reduction in GDP performance in 2020, compared to their previous estimate of 1.8% reduction in GDP, made at the end of March. Economic circumstances are fluid in the region and are changing on a daily basis.

Interest rates

The financial market already predicted a fall in the official interest rate, currently at 3.75% per annum, to 3.25% per annum in early May. Last week, analysts also started to speculate of a new cut in mid-June, to 3% per year - a level at which it would close 2020. By the end of 2021, market expectations remained at 4.5% per annum.

Brazilian real

The Brazilian real has weakened against the US Dollar this year, reaching a historic high of R$5.90 on 13th May. It has strengthened in June to be sitting at R$5.40 and is expected to be close to $5.08 by the start of 2021.

Trade balance

The projection in 2020 rose from US$35 billion to US$36.1 billion positive trade balance. For 2021, the estimate by market experts has advanced from US$35 billion to US$35.6 billion.

Foreign investment

The report forecast a decrease in foreign direct investment in Brazil in 2020 from US$73 billion to US$71 billion. For 2021, the analysts' estimate remained at US$80 billion.

Industrial production

The country's general average for industrial production fell by a record 18.8% in April and reached the lowest level ever recorded in the historical series of the survey since it commenced in 2002. Industrial production fell from March to April in 13 of the 15 regions surveyed by the Brazilian Institute of Geography and Statistics (IBGE). In eight locations, the drop was the largest observed in history of the survey. The eight regions that registered a record fall in April were: Amazonas (-46.5%), Ceará (-33.9%), Northeast Region (-29.0%), Paraná (-28.7%), Bahia (-24.7%), São Paulo (-23.2%), Rio Grande do Sul (-21.0%) and Rio de Janeiro (-13.9%). Only Pará (4.9%) and Goiás (2.3%) registered an increase in the month, favoured by the results of the extractive sector in Pará, and by the food and pharmaceutical products sector in Goiás. Oil exports from Brazil rose 40% in early May in comparison with the same month last year. Shipments remain strong with Petrobras counting on firm demand from China. Petrol prices have already dropped 52% at the refinery, but the reduction in gasoline prices has only 10% at the pump.

Supply chain, freight & logistics

Port terminals and shipping companies are already beginning to face the second stage of the crisis caused by the COVID-19 pandemic. While the first drop in cargo movement occurred due to the paralysis in China, it is now Brazil and Europe that suffer the effects of social isolation.

In the coming weeks, trips from China to Brazil are expected to have cancellations again - just when imports returned to normal, with the gradual resumption of activities. The main reason, according to the Vice President of Brazil's shipping company Hapag-Lloyd, Luigi Ferrini, is the retraction in Brazilian demand, caused by the closing of factories and stores in the country. The exchange rate fluctuation of the past few weeks has also put a brake on imports, according to Ricardo Arten, President of Brasil Terminal Portuário (BTP) - one of the largest container operators in Santos. In addition to the expensive US dollar, there is an uncertainty factor: as the trips can last up to a month, in the case of China, it is difficult to predict what the exchange rate will be when the ordered cargo arrives in Brazil, which creates insecurity.

The Ministry of Agriculture, Livestock and Supply (MAPA) has started to implement new procedures for imported plant products and by-products that will reduce bureaucracy in Brazilian ports and airports. Currently, inspectors needed to access three different systems. The user also needed to deposit the same information in different databases. From now on, all information will be processed on the Single Foreign Trade Portal. The initiative will allow low-risk cargo — or those where control is only documentary — to be released in a few minutes. This frees up inspection teams to focus on inspections of products that are higher risk, as well as perishable products that need to be released.

This link informs the products HS codes that are covered by this measure (note wine is included, while kiwifruit is not).

The Government has removed import tariffs on an additional 61 pharmaceutical and medical-hospital products used to combat COVID-19 until 30 September this year. Included are products such as kits for coronavirus tests, medical and hospital equipment and devices, as well as drugs such as chloroquine, hydroxychloroquine and azithromycin for the exclusive use of hospitals.

View the full products' HS codes list here.

The Foreign Trade Chamber (Camex), an inter-ministerial body chaired by the Ministry of Economy, has zeroed the Import Tax on 141 new products, in the context of trade policy measures aimed at combating the COVID-19 pandemic. The measure covers medicines (such as dipyrone and paracetamol); medication supplies; hospital equipment (such as diagnostic ultrasound, kits for tracheostomy and laryngeal masks); in addition to hygiene products (such as medicinal soaps and liquid soaps). The items were defined in a joint piece of work between CAMEX Executive Secretariat, the Ministry of Health and the Federal Revenues.

The Resolution No. 32/2020 ( covers products classified under 92 HS codes. With the new resolution, the number of products that had the import tariff zeroed to fight the pandemic reaches 313.

Research by NTC & Logística (Association of Transportation Companies) found Brazil has registered a 26.9% drop in the volume of cargo transported by trucks between March 23 and 29.

Over the same period, the demand in transportation for agribusiness goods dropped 12.4% due to the higher costs to transport goods. This is in part due to a lack of drivers willing to make the trip due to uncertainty over route infrastructure, and the reduced number of service stations open.

Transportation of all types of products destined for supermarkets, however, increased during the same period.

Government support

Federal taxes postponement

The Secretariat of Federal Revenue has announced it will postpone payments of some federal taxes:

  • PIS/Pasep, Cofins and the employer's contribution to Social Security from April and May to August and October.

  • Individual Income Tax (IRPF) return deadline has been postponed from 30 April to 30 June.

  • The government has eliminated the IOF (Tax on Financial Operations) from April 3rd until July for a series of credit operations. Among them, loans and financing contracted by individuals, and loans and financing from micro and small companies up to the limit of BRL 30,000 (9,600 NZD)

Employment protection and salary reduction schemes

Employment protection programme

The Labour Secretariat of the Ministry of the Economy has reported that there have been 960,000 unemployment insurance claims in the month of May, an increase of 53% on the same month last year. The three states with the highest number of claims were São Paulo (281,360), Minas Gerais (103,329) and Rio de Janeiro (82,584).

According to official government data, there have been 1,944,125 unemployment insurance claims requested since the second half of March, representing a 26% increase compared to the same period last year (1,541,517 claims).

The Government has announced a new employment protection programme, allowing for employees and employers to reach a consensus on a reduction of working hours by 25%, 50%, 70% or total suspension of the employment contract. The Treasury will supplement wages, although not in their entirety. This move has been made to preserve jobs for a period equivalent to the reduction or suspension of the contract, currently expected to be up to 90 days.

The programme will cover 73% of registered workers, or 24.5 million people. The fiscal cost of the labour measures announced is estimated at R$51.2 billion (NZ$16.4 billion). Companies with up to R$4.8 million (NZ$1.5 million) in revenues will not be required to pay any aid to their workers. Companies with higher revenues will have to pay 30% of the salary, which will be added to the Government's benefit.

Credit for small and medium-size companies​

On 2nd April, Central Bank Governor, Campos Neto, announced a Provisional Measure (MP) credit line of R$40 billion (NZ$12.6 billion) for small and medium size companies, available from 3 April. This has been designed to help companies finance the salary of employees. The measure will allow the financing of the payroll for companies with annual sales between R$360,000 (NZ$114,000) and R$10 million (NZ$3.2 million). R$20 billion (NZ$6.3 billion) per month will be made available for two months.

Support for self-employed

Citizenship Minister, Onyx Lorenzoni, announced that the emergency aid to self-employed workers, known as 'coronavoucher', could benefit 65 million to 70 million people. The Minister said payments will begin 8 April. Most of the payments will be made through an app downloaded to mobile phones.

Through its 'Social Tariff' programme, the federal government is also looking at ways to exempt low-income consumers from paying electricity bills for three months

Consumer trends

The National Electric System Operator announced that electricity consumption fell by 15% after the introduction of social distancing measures, indicating an economic slowdown in commercial and industrial activities.

According to Latin America's largest payment system Cielo, debit and credit card purchases dropped 44% compared to February. Clothing retail sales dropped 83%, while restaurant sales dropped 72%.

Brazilian retailers lost 22% in revenue in March, compared to the same period last year. The services segment (tourism, transportation, bars, restaurants, automotive services and auto parts) was the most affected, with a decrease of 53.2% in the annual comparison.

More than 600,000 people may have been laid off from bars and restaurants with the escalation of the coronavirus in Brazil, according to a projection by the ANR (National Association of Bars and Restaurants) based on a survey with its members.

Sector insights

As is to be expected, numerous sectors have been impacted by the COVID-19 pandemic. Below you'll find information on any COVID-19 effects across important sectors and industries in Brazil.


Brazil’s agriculture sector is performing very well in the current year with agribusiness exports and imports reaching record levels. In April, the value of agri exports exceeded US10 billion for the first time for a month period. The previous record for foreign sales for a month occurred in April 2013, when exports totalled US$9.65 billion.

The same is true for agribusiness imports, which are also at record levels. In the last 12 months (from June 2019 to May this year), Brazil imported a record 319,000 tons of agrochemicals, worth US$2.95 billion. For the same period, imported fertilizer amounted to 32 million tons, with worth in excess of US$8 billion.

Producers are benefiting from good sales margins for their produce. Meanwhile, more than 700 food production facilities have already been authorised to export to 24 countries since January 2019. Since January 2019, Brazil has opened 65 markets for the export of agricultural products, with 30 markets registered this year alone.

The agriculture sector has a strong outlook, in contrast to other sectors of the economy. The government estimates an agricultural turnover for 2020 of R$697 billion (NZD 198 billion), which would be the highest in 31 years. The results are helped by increased production of meat, soy and coffee. If confirmed, 2020 will exceed 2019's turnover by 8.6%, which was also a record. For soybeans, corn, chicken and pork, exports were at levels higher than the last 5 years, says the Ministry of Agriculture. According to the US Department of Agriculture (USDA), Brazil supplies 51.4% of world demand for soybeans and 33% of chicken meat.

Beef exports may rise with the standoff between China and Australia. The volume of beef exported by Brazil from January to April this year is at record levels and this result is mainly due to increased demand from China. The Centre for Advanced Studies in Applied Economics (CEPEA) also states that Brazilian exports could be further strengthened as a result of China's recent embargo on the imports of beef from some meatpackers in Australia. The country is an important meat supplier to the Chinese.

Pork meat exports from Brazil increased 19% in April, bringing the total to 72.8 thousand tons in April, up 19% on the same period last year, according to the Brazilian Animal Protein Association (ABPA).

Poultry exports fell 4.7% in April, but increased 5.1% in the four-month period, said the Brazilian Association of Animal Protein (ABPA). The Association did not detail the reasons that led to the drop in monthly performance.

The federal government has released emergency credit lines for small to medium-sized farmers to face the crisis caused by COVID-19. For small farmers, financing was made available with interest rates of 4.6% per year and a limit of R$20,000 (approximately NZ$6,400) per farmer. For medium-sized farmers, interest will be 6% per year with a limit of R$40,000 (NZ$12,800). All credit lines allow repayment terms of up to three years.

Cooperatives, agro-industries and cereal producers, on the other hand, will have financing made available for the storage and product commercialisation of up to R$65 million (NZ$20.7 million) per beneficiary. Interest rates will vary from 6 to 8%. Credit lines will be available until 30 June.

Additional resources

Below you can find information and contact details for other New Zealand government and international agencies regarding their response to COVID-19.

New Zealand Government agencies
COVID-19 helpline for businesses
New Zealand Customs
Ministry for Primary Industries (MPI)
New Zealand Export Credit (NZEC)
MFAT Export Helpline
MFAT Safetravel
Callaghan Innovation
Ministry of Health
WorkSafe New Zealand

Global agencies

World Health Organization (WHO)
Centers for Disease Control and Prevention (CDC)

Contact NZTE

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