The new negative result of GDP (Gross Domestic Product) sum of all final goods and services produced in the country puts Brazil back into a technical recession. The economic definition is used to describe two consecutive quarters of falling activity. Between April and June, the national economy retreated 0.4%.
It means that Brazil has become poorer and that, therefore, people living in the country are also poorer, explains Claudio Considera, associate researcher at FGV Ibre.
When you measure GDP, you ultimately measure what a given society has produced out of wealth. If a country were to spend a whole year without producing anything, for example its GDP would be zero Thus, the higher the GDP result, the better.
You can’t think about distributing what you don’t have. Without money, nothing is done. Without having a high GDP, the government does not collect and is unable to offer services to the population
Falling GDP means the country’s economy is weak. Rising GDP means the economy is strengthening and production heating up. With greater production, there is greater demand for new jobs. Employed people have income. And the more income a country has, the better.
But Considera says that what matters even more to analyze is not just GDP, but GDP per capita, which is the value of GDP divided by the country’s population.
If the country’s population grows at a faster rate than GDP grows, the same amount of money will be shared by a greater number of people, which will result in less money for everyone.
In 2020, the Brazilian GDP closed the year at R$7.5 trillion GDP per capita was R$ 35,161.70 (2019 data). Roughly speaking, it is as if each person in the country had this income during the year. But as the country has great inequality, some receive much more than that, and others not half.