Bolsonaro to Raise Social Assistance Fund to Brazilians

UMMATIMES - Brazilian President Jair Bolsonaro will increase the monthly social assistance fund under the welfare program to 300 reais from 190 reais, or to 60 dollars from 38 dollars from December. In an interview with RecordTV on Tuesday (15/6) evening, Bolsonaro said the increase in social assistance funds was higher than the consideration being discussed at the Ministry of Economy.

Officials have indicated that the "Bolsa Familia" program could be raised to 250 reais or $50. But Bolsonaro said an increase in social assistance funds was needed to compensate for food inflation.

Bolsonaro's popularity during the Covid-19 pandemic has dropped dramatically. He has been criticized for neglecting the handling of the coronavirus and the vaccination programme. Bolsonaro is gearing up for elections in October 2022.

The Ministry of Economy declined to comment on the social assistance fund. But a source in the economic team said that increasing social assistance funds would not threaten the country's fiscal policy.

"It will have no effect. Let's see what is best to do. The program is under construction," said the source, who asked not to be named.

Under the rules, public spending cannot rise higher than the inflation rate of the previous year. This limit is safe so far, because spending splurge to fight the pandemic is an emergency spending.

Brazil's budget deficit and debt dynamics have improved in recent months thanks to record tax revenues, a stronger-than-expected economic recovery and inflation. Annual inflation is currently at 8 percent, and gives the government more leeway to increase spending next year without breaking the line. According to the calculations of economists at Barclays, Brazil is likely to allocate as much as 124 billion reais or an additional 25 billion US dollars.