Brazil: Anti-poverty aid program needs US$11.2 billion

Maintaining Brazil’s cash transfer program for low-income families Brazil Aid (Auxílio Brasil) at current levels will require budgetary expenditures of R$50 billion to R$60 billion (US$11.2 billion) in 2023.

It was announced by the Special Minister of Finance and Budget, Esteves Colnago, on Monday, July 25.

To reduce government spending, the draft budget submitted to Congress next month will likely reduce transfer payments from R$600 to R$400 per month. However, Congress is unlikely to approve the lower amount in a campaign scenario before the October elections.

The Brazil Aid program was created in April 2020 in response to the COVID-19 pandemic and built on the previous Family Grant (Bolsa Familia) cash transfer program, which offered a lower income level.

Congress recently approved a massive spending package that exceeds the constitutional spending cap and includes an increase in the cash social assistance program from R$400 to R$600, but only for this year.

President Jair Bolsonaro, seeking reelection in October, is trailing by about nine percentage points in the opinion polls and has promised that the program will provide R$600 to Brazilians in 2023, even though he did not specify the budget design.

Former President Luiz Inácio Lula da Silva, who leads in the polls, has also said he wants to maintain the higher figure and lift the spending cap enshrined in the Constitution.

With information from Latina Press