Floods and flash floods caused by heavy rains that hit Rio Grande do Sul from the end of April had a significant impact on the local industry, according to data from the State Revenue Service. In May, sales of the industry in Rio Grande do Sul fell by 15.6% compared to the same month of the previous year.
The bulletin on tax collection and issuance of invoices in the period indicated that the most affected sectors were: agricultural inputs, with a decrease of 39.1%; metal-mechanic, with 24.4%; and pneumatic and rubber, with 18.2%.
The textile and clothing sector recorded a 17.2% reduction in sales, and the wood, cement, and glass sector dropped by 16.1%.Sales in the agricultural sector fell by 9.9% in May compared to the previous year, while the food sector had a reduction of 5.3%.
“Despite this, all analyzed sectors already show signs of recovery after the most critical moment of the meteorological crisis,” the RS government said in a statement.
Official data indicates that the greatest economic impact was recorded in the first week of the disaster, with an average general decrease of 37.3%.
The report on the economic activity in Rio Grande do Sul detailed the losses by region, with the largest declines observed in the Northwest Border (-63.2%), Alto do Jacuí (-28.6%), Vale do Rio dos Sinos (-26.2%), Vale do Taquari (-26.0%), and Vale do Caí (-25.9%).
The Metropolitan Region of Porto Alegre had a 21.2% decrease in industry sales in May 2024 compared to the same month in 2023.
Overall, the collection of the State Tax on Circulation of Goods and Services (ICMS) in RS in May was R$ 640 million (-16.1%) lower than projected at the beginning of the year.
According to the government of Rio Grande do Sul, 91% of the 278 thousand ICMS taxpayer establishments in RS are in municipalities that declared a state of public calamity or emergency situation.
Of these, 44 thousand establishments (16% of the total), responsible for 27% of ICMS collection, are in flooded areas.
Impact on GDPThe total impact of the climatic tragedy in Rio Grande do Sul on the national economy has not yet been fully assessed.
The Brazilian Institute of Geography and Statistics (IBGE) recently reported a growth of 2.5% in the Gross Domestic Product (GDP) of Brazil in the first quarter of this year, but highlighted that this calculation does not include the effects of rain and floods in RS.
“This will only be reflected when we have specific monthly surveys for this period,” explained the coordinator of National Accounts at IBGE, Rebeca Palis.In 2023, Rio Grande do Sul was the fifth state with the highest GDP in Brazil, behind São Paulo, Rio de Janeiro, Minas Gerais, and Paraná.
The economy of Rio Grande do Sul generated R$ 640.299 billion last year, representing 5.9% of the national GDP.(With information from Agência Brasil).