Brazil government readies $32 billion of economic stimulus -sources

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FILE PHOTO: Shopping at a weekly street market in Rio de Janeiro

By Lisandra Paraguassu and Bernardo Caram

BRASILIA – Brazil’s federal government plans to announce on Thursday a program providing some 165 billion reais ($32 billion) of economic stimulus during the current election year, three people familiar with the plan told Reuters.

The so-called ‘Income and Opportunity Program’ includes an early payment of some public pension checks, a measure letting workers withdraw some cash from a severance fund known as FGTS, a new microcredit program, and an expansion of payroll-deductible loans, said the sources, speaking on condition of anonymity.

They said at least 30 billion reais will be released from FGTS, allowing for up to 1,000 reais per worker, a move Economy Minister Paulo Guedes had already indicated was on its way.

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 Under normal circumstances, money can only be withdrawn from FGTS in specific situations, such as if a worker retires, is fired, or wants to buy property.

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

Bolsonaro, who is widely expected to seek re-election, is currently trailing in opinion polls to former leftist President Luiz Inacio Lula da Silva.

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

($1 = 5.0949 reais)


(Reporting by Lisandra Paraguassu and Bernardo Caram; Additional reporting by Marcela Ayres; Editing by Brad Haynes, Nick Zieminski and Rosalba O’Brien)

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