May 16, 20 - 6:06 pm - LABS

Brazilian emergency aid could result in BRL 1 trillion deficit if extended

Brazil’s emergency payments to aid low-income workers during the new coronavirus pandemic already total around BRL 120 billion ($20.5 billion) and that figure could rise.

reais brazilian currency
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But, according to a report on Valor Econômico, the BRL 600 monthly aid, which benefitted more than 50 million Brazilians so far, was “poorly designed, resulted in distortions among the beneficiaries and became large from a fiscal point of view.”

The news outlet says that was the conclusion researchers at the Brazilian Institute of Economics (Ibre / FGV) came to during a teleconference. If the program were extended, the expenditure would reach BRL 600 billion in 12 months, an amount equivalent to 20 times of the Bolsa Família, the main cash-transfer program in the country, and also points to a primary deficit in 2020 of more than BRL 1 trillion.