Political Risk Latin America Blog @PolRiskLatam

Brazil to Boost Spending on Poor by 2.1 Billion Reais

Posted in News and Articles, Political Risk by politicalrisklatam on March 2, 2011

by Carla Simoes and Andre Soliani for Bloomberg News, March 1st, 2011.

Brazilian President Dilma Rousseff plans to hand out an extra 2.1 billion reais ($1.26 billion) to Brazil’s poorest families through the government’s “Bolsa Familia” welfare program. The Bolsa Familia shows “our commitment to the sector of the Brazilian population that was always abandoned,” Rousseff said today in an event in Irece, a city in the northeastern state of Bahia. The government will increase by as much as 45 percent its cash payments to families with children younger than 15 years old, the government said in an e-mailed statement. The average benefit to poor families will increase to 115 reais from 96 reais.

The announcement of the increase comes a day after the government detailed plans to slash 50.1 billion reais from this year’s budget by reducing subsidies to the national development bank, trimming its housing program and postponing the purchase of 36 fighter jets. The cuts aim at slowing economic growth and reining in inflation, which is at a 26-month high.

The central bank, which said it was counting on increased public savings to contain inflation this year, will raise interest rates for a second straight meeting tomorrow, the futures market shows. Traders are wagering policy makers, after lifting the Selic by half a point to 11.25 percent in March, will push the rate to 11.75 percent.

The “Bolsa Familia” program pays monthly benefits to 12.9 million families, according to an e-mailed statement sent by the Social Development Ministry. (continue reading… )

 

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