May 3, 2019
1. Bolsonaro administration developing measures to boost economy
The federal government is developing a package of around 50 measures in an attempt to help the business sector and encourage economic growth.Some of the measures being considered by the Bolsonaro administration include regulating the real estate industry, increasing credit policies and creating incentives for agriculture. The measures will be officially announced in the next few days. The government is also considering creating a reverse mortgage option, a measure in which people will be able to offer their house to a financial institution and receive monthly payments for a determined timeframe. The bank will be able totake ownership of the property after the owner dies. The system already exists in developed countries and might interest pensioners who require greaterincome, which according to the administration would boost consumption.
2. Bolsonaro asks Congress forextra R$ 248 billion
Time is running out for the federal government to acquire an additional R$ 248 billion (USD $63 billion) to cover the costs of subsidies and social benefits for pensioners, disabled people and the elderly in need. It is the first time in history in which anadministration has had to ask for Congressional approval to obtain more funds, following changes to federal budget rules. The rule was approved last year by then-President Michel Temer and prevents the government from amassing debt to pay for salaries, pensions and social benefits. The administration requires 257 votes in the Chamber of Deputies and 41 votes in the Senate to authorize the selling of government bonds. Behind the scenes, representatives do not believe the government will be able to gather enough support to get the bill approved by June. Of the R$ 248 billionrequested, R$ 201.7 billion (USD $51.2 billion) are for expenditures frompensions.
Folha de S.Paulo: Governo corre para Congresso liberar extra de R$ 248 bilhões
3. Ahead of privatizations, state company profits increase by 132%
State-run companies logged a net profit of R$ 74.3 billion (USD $18.9 billion) in 2018, an increase of 132% and their best result in the last eight years. The results are mostly due toperformance guidelines implemented over the past few years. The new privatization policy announced by Jair Bolsonaro’s administration will focus on selling state assets beginning this year, which will affect companies such as Petrobras, Banco do Brasil Caixa and BNDES (National Bank for Economic and Social Development). Privatization plans for Petrobras – which plans to sell its stake in BR Distribuidora, and Caixa – which will sell its shares in Petrobras, should earn an extra R$ 20 billion (USD $5.1 billion) for the administration by December. Together with other plans for privatizingcompanies, the government expects to raise R$ 80 billion (USD $20.3 billion), the most since 2010.
4. 28.3 million people are either unemployed or have part time jobs
According to the Brazilian Institute ofGeography and Statistics (IBGE), the underutilization of the work force has reached a new high in the first quarter of 2019, affecting 25% of the economically active population. During the first three months of the year, 28.3 million people found themselves unemployed or underemployed, the highest rate since 2012. Considering only people who are without a job, theunemployment rate stood at 12.7%. According to IBGE, this percentageshows that an additional 1.2 million people were left without a job in the first quarter of the year. There are now 13.4 million Brazilians who are unemployed, while 91.9 million Brazilians are employed – 873,000 less than in the last three months of 2018. The average monthly income remained stable at R$ 2,291 (USD $581.96).
Folha de S.Paulo: 25% dos trabalhadores estão sem emprego ou subutilizados
Valor Econômico: Brasil já tem 13,4 milhões de desempregados, diz IBGE
O Globo: Nenhum setor contrata e desemprego sobe para 12,7%
5. Labor unions call for strike in response to pension reform
In a never–before–seen joint act that took place on May 1st, leaders fromsome of Brazil’s biggest labor unions called for a strike to protest the pension reform currently under debate in Congress. The strike is planned for June. According to the unions, the reform does not respect the minimum wage and does not make changes to the privileges given to public servants and the military. Labor unions have suffered a deep financial impact since 2017 with the end of the union tax. This year, unions suffered another cut with the end of mandatory contributions made directly through employee’s payslips. On Wednesday, President Jair Bolsonaro addressed the nation byradio and television but did not mention measures that will affect workers. During his speech, he focused on the measures that were created to make it easier to open small enterprises and keep them in business.
Valor Econômico: Centrais sindicais se unem contra nova aposentadoria
Folha de S.Paulo: Bolsonaro fala para empreendedores no Dia do Trabalho