Brazil's Guedes warns of virus-control measures' economic toll

BRASILIA (Reuters) - The coronavirus is pushing Brazil toward food shortages and broader production problems, Economy Minister Paulo Guedes warned on Thursday, as he joined business leaders in a protest at the Supreme Court against measures enforced by state governors to repress the virus.

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After an impromptu meeting with Supreme Court Chief Justice Dias Toffoli, Guedes said he had heard warnings of production seizing up and causing food shortages within a month.

He gave no details, but along with the politically-charged protest itself, the warning raised eyebrows in Brasilia. Far-right President Jair Bolsonaro headlined separate protests in the Brazilian capital on Sunday where supporters called for the Supreme Court to be shut down.

Bolsonaro arranged the meeting with Toffoli and a handful of senior ministers during an encounter with more than a dozen business leaders. After huddling with the president, the entire delegation walked across a government plaza and into the Supreme Court building.

Bolsonaro said some states had gone too far in their social distancing measures, and that steps must be taken as soon as possible to bring the economy out of “intensive care.”

The Supreme Court has rejected Bolsonaro’s efforts to overturn those state orders.

The court recently authorized an investigation into Bolsonaro after a popular justice minister quit last month, accusing the president of trying to meddle in sensitive investigations by appointing a new federal police chief. A Supreme Court justice then blocked Bolsonaro’s attempt to appoint a family friend as the nation’s top cop.

Brazil has the worst coronavirus outbreak among emerging market nations, with 125,218 confirmed cases and 8,536 deaths by Wednesday, when the Health Ministry announced a record 615 deaths in one day.

Banks polled by Brazil’s central bank predict the economy will shrink 3.8% this year and charities say more families are skipping meals as incomes dry up.

Brazil’s currency sank to an all-time low on Thursday after a bigger-than-expected central bank rate cut to stave off what could be the worst annual economic contraction in a half century. However, there has been little impact so far on food supply within the country or exports of a bumper soy crop.

Many states have bristled at what they call the federal government’s laissez-faire attitude toward the virus, and most have shut non-essential businesses and services, including some former allies of the president.

The states of Maranhao, Para and Ceara declared more aggressive lockdowns in certain areas this week, although the measures appear to have been only lightly enforced.

In his comments to reporters, Guedes repeated a call for public sector workers to forgo salary increases for two years. He also said he had asked Bolsonaro to veto sections of an aid package that would allow for such raises.

Bolsonaro said he fully supported Guedes on the matter.

Reporting by Marcela Ayres and Lisandra Paraguassu; Writing by Gram Slattery; Editing by Brad Haynes, Daniel Wallis and Tom Brown