Brazilian government prepares US$32 billion economic stimulus plan

RIO DE JANEIRO, BRAZIL – Brazil’s federal government plans to announce on March 17 a program that will provide about R$165 billion (US$32 billion) of economic stimulus this election-marred year, three people familiar with the plan told Reuters.

The so-called “Income and Opportunity Program” includes early payment of some public pension checks, a measure allowing workers to withdraw some cash from their severance funds, known as FGTS, a new microcredit program, and an expansion of payroll-deducted credits, said the sources, who spoke on condition of anonymity.

The sources commented that at least R$30 billion will be released from the FGTS, allowing up to R$1,000 per worker, a measure that Economy Minister Paulo Guedes had already indicated was underway.

Both the government of President Jair Bolsonaro and that of his predecessor Michel Temer had already implemented measures to release these funds. Under normal circumstances, money can only be withdrawn from the FGTS in specific situations, such as if a worker retires, is fired, or wants to buy a property.

The sources said the government would also advance the payment of some public pension checks, reiterating a measure taken in 2020 and 2021 during the coronavirus pandemic. The expected July payment would reach pensioners’ pockets before the October elections.

Bolsonaro, who is widely expected to seek re-election, is currently lagging in opinion polls behind leftist former president Luiz Inácio Lula da Silva.

The sources said that the creation of a microcredit program and the expansion of payroll-deductible loans aim to allow workers to access resources that could be invested in small businesses.

With information from Reuters