Is this an electoral measure or a real plan to help the Brazilian population? The far-right president Jair Bolsonaro who is seeking a second term this year, announced a plan on Thursday to inject more than 150 billion reais (about $30 billion) into the economy, especially for the poorest.
This program aims to “increase the purchasing power of Brazilians, especially those with low incomes”, explained the presidency in a press release. The plan notably contains measures such as the advance payment of a salary supplement (13th month) for retirees, the authorization to use the resources of a workers’ guarantee fund reserved for cases of dismissal or exceptional situations and easy access to credit.
Raise your popularity rating
In power since January 2019, the “tropical Trump” is suffering a sharp erosion of his popularity, partly because of his mismanagement of the pandemic which has already killed more than 655,000 people in Brazil, but above all because of high inflation. In February, the inflation rate was 10.54%, resulting in a reduction in the purchasing power of wages, especially for the poorest.
The war in Ukraine has aggravated the situation, causing an increase in the international price of oil and its derivatives . Faced with this situation, the Brazilian public company Petrobras announced last week an increase of 18.8% in the price of gasoline and 24.9% in that of diesel. The measure was strongly criticized by Bolsonaro .
Upcoming duel against Lula
In an attempt to rein in rising prices, the Central Bank of Brazil raised its policy rate again this week to 11.75%, its highest value since April 2017. Latin America’s largest economy weathered a brief recession in the last quarter and closed 2021 with 4.6% growth compared to 2020, when it suffered the greatest impact from the coronavirus pandemic. But for 2022, forecasts are for growth of just 0.49%.
Jair Bolsonaro will seek a second term in October, likely to face the left-leaning former president Luiz Inacio Lula da Silva , favorite in the polls. The former president had also acquired great popularity among the poorest Brazilians by launching social transfer programs such as the “Bolsa familia”.
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