The Brazilian middle class has decreased by 4% just within one year, mainly due to the Covid-19 pandemic. The latest data revealed by the Brazilian private research company Instituto Locomotiva showed that while in 2020 the Brazilian middle class accounted for about 51% of the country’s population, in 2021 it shrank to 47%. Thus, the number of people in this social layer fell by about 4.9 million to stand at 100.1 million in 2021, almost similar to the number of people in the lower class.
Instituto Locomotiva divides Brazil’s middle class into three subcategories – C2, C1, and B, and accordingly, three subcategories of monthly income, with the lowest one being US$119 and the highest US$672.
“This group of the population has neither savings nor the resources which the rich have to get through this pandemic. They also didn’t receive emergency aid and suffered the most during the crisis,” says economist Renato Meirelles, president of the Locomotiva Institute.
The downturn was largely caused by the strong impact the coronavirus pandemic had on Brazil’s social and economic life. The country was among the worst hit by the pandemic, reporting about 7 million confirmed cases by December 2020 and over 180,000 deaths. The unemployment rate saw an upward trend, reaching 13.9% in December 2020, a figure that showed a slight improvement comparing to the all-time high of 14.6% recorded in September 2020, according to the national statistics institute, IBGE.
Brazil’s middle class stopped expanding back in 2014 when the country went through a severe economic crisis. Yet, the 4% drop is the highest in the past 10 years in relation to the total number of the population, the survey found. The upper class witnessed a downward trend as well, albeit the decrease was not so drastic. Thus, in 2011, 8% of Brazil’s population belonged to the upper class, while in 2021 the figure fell to 6%.
The downward trend is not characteristic of Brazil only. An analysis by Pew Research Center estimated that due to the pandemic, at the global level, the middle class would shrink by 54 million people, the upper-middle-income class by 36 million, and the high-income class by 62 million. Accordingly, the low-income class was expected to increase by 21 million people and poor by 131 million.
