Government provides minimum wage of R$ 1,169 in 2022, no increase above inflation | Economy

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Posted 31/08/2021 15:54 | Updated 08/31/2021 7:08 PM

The federal government presented the proposed annual budget law (PLOA) for next year this Tuesday, 31, to Congress. In the bill, the minimum wage is expected to be R$ 1,169 next year, higher than that disclosed in the Budget Guidelines Law (LDO) sent to Congress in April, which was R$ 1,147.

The amount presented by the government is R$69 higher than the current minimum wage of R$1,100. The increase took place from April until now due to the inflation that took place in recent months. However, the readjustment does not represent a real increase (above inflation), since the growth should be 6.2%, equivalent to the percentage of the National Consumer Price Index (INPC), a rate that serves as a correction, at least, for remuneration, informed by the Ministry of Economy.

This year, the minimum wage did not replace last year’s inflation. The government presented a correction of 5.26%, but the INPC reached 5.45% in 2020.

According to a technical note from the Inter-Union Department of Statistics and Socioeconomic Studies (Dieese), the minimum wage is the reference income for 50 million people in Brazil. In this total, more than 24 million are beneficiaries of the National Institute of Social Security (INSS).

In the proposal sent on Tuesday, there is no forecast for growth in spending for payments for social projects, such as Bolsa Família. President Jair Bolsonaro (non-party) has said a number of times that he intends to increase the average amount of the benefit, which is expected to start at the end of emergency aid payments in November. The program will be renamed and will be called Auxílio Brasil.

budget law

The proposal sent on Tuesday presents a primary deficit of R$ 49.6 billion, equivalent to 0.5% of the Gross Domestic Product (GDP).

In the 2022 LDO, a deficit of R$170.5 billion was projected for next year, more than three times higher than the new PLOA projection. For 2021, the latest estimate is a deficit of R$ 155.1 billion, or 1.8% of GDP.

The PLOA still considers a primary deficit of BRL 2.6 billion for states and municipalities in 2022 and also a deficit of BRL 2.6 billion for state companies next year.

As a result, the primary result of the consolidated public sector is expected to have a deficit of R$ 54.8 billion (0.6% of GDP) in 2022. In the 2022 LDO, the projection was for a gap of R$ 177.5 billion ( 1.6% of GDP).

Unlike the presentation of the PLOA in previous years, this time the economic team did not indicate projections for the primary result in the years ahead of the proposal (in this case, 2023 and 2024).

In the 2022 LDO, deficits of R$145.0 billion and R$102.2 billion were forecast for the Central Government in 2023 and 2024, respectively. With the new smaller deficit projection for 2022, these estimates were outdated.

In the project, there is reinforcement for resources in the order of R$ 10.7 billion for Health, of which R$ 7.1 billion in continuous actions to combat the Covid-19 pandemic.

In addition, it prioritizes ongoing investments in the Executive Branch, as well as funds for carrying out the Demographic Census in 2022, with a forecast of R$ 2 billion, the National Science and Technology Fund, with the incorporation of the revenue foreseen for the fund in 2022 in the amount of R$ 8.5 billion and Auxílio Brasil, at the same level of resources foreseen for Bolsa Família in 2021. The forecast is for a budget of R$ 34.7 billion and target to serve 14.7 million families.

The basic core of the new program is composed of three benefits that aim to promote child and youth development through income transfer with conditionalities: Early Childhood Benefit, paid to families with children between 0 and 36 months, incomplete, Family Composition Benefit, targeted to families with pregnant women and people aged 3 to 21 incomplete in their composition, and Benefit for Overcoming Extreme Poverty, granted to families that have not overcome the extreme poverty range after paying the two previous benefits.

Regarding the budget for the 2022 Census, the IBGE stated that the PLOA-2022 sent to the National Congress by the Executive is necessary in the rite, but not sufficient in the approved amount, to meet the technical parameters determined by the STF for carrying out the Demographic Census. According to the institute, it will work with the National Congress, in a work of mobilization and convincing about the public interests related to the Demographic Census, so that the Union can ensure what was determined by the Supreme Court, that is, the necessary and sufficient conditions for its realization of the Demographic Census in 2022 (crystallized in the amount of R$ 2,292,907,087.00).

“By determining the adoption of administrative and legislative measures to carry out the IBGE Demographic Census in the financial year following the granting of emergency relief (2022), the STF established that the Union must adopt all necessary legal measures to make the research feasible census, including with regard to the forecast of budget credits for the realization of public expenses,” he said in a note.