Class D/E income should grow less in the Lula 3 government, says study

Brazilians from the so-called D/E class, with a family income of up to R$3,200, should see their income grow less than expected until the end of the government of President Luiz Inácio Lula da Silva (PT) in comparison with the A and B classes, according to a recent study by Tendências Consultoria.

The survey points out that, at the end of this year, the increase in income will be 6.4% among Brazilians in the D/E class due to the reinforcement in social programs such as the increase in Bolsa Família and Auxílio Gás, the reduction in the INSS queue and the return of Minha Casa Minha Vida, among others.

It will be a growth similar to that of classes A and B, of 6%, but that will squeeze C, with gains of only 2.2%. However, starting next year, these gains will start to be diluted and the distance between classes will increase again.

“Social mobility from now on will happen at a reduced pace, a phenomenon typical of countries with high inequality. While there is slow migration to the middle class, the upper classes will lead the recovery and income growth”, explains Lucas Assis, macroeconomics analyst at Tendências, in an interview with Folha de São Paulo.

According to specialists, the increase in income that will be seen this year will not be reflected in 2024, since there will not be a new injection of resources into the economy as occurred with the BRL 145 billion PEC at the end of last year, which helped to inflate the government’s social programs and increase per capita family income.

“Next year will be one of great fiscal uncertainty”, explains Marcelo Neri, director of FGV Social.

According to him, the fiscal measures taken in the second half of last year by former president Jair Bolsonaro (PL) helped to raise the per capita income of families to R$374, the same level corrected by visa inflation in 2014, of R$375, the best level in the historical series.

However, in the long run, the study shows that the economic recovery will benefit the richest (earnings above R$7,600) and leave the middle class (R$3,200 to R$7,600) at a more stable pace. The advancement of class D/E to C, which was one of the main highlights in Lula’s first two governments, will not be as intense in this third term.

Tendências points out that income growth will be, at the end of 2026, 0.7% for class D/E; 1.4% for C; 2.8% for B and 3.7% for A. The richest will benefit from a higher return on investments (with high interest rates), rents and profits from the companies themselves, which should return to historically higher levels than in recent years.