Lula’s package in the economy targets consumption and risks of the 1st year – 02/16/2023 – Bruno Boghossian
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After raising a public fight against a threat of low growth, Lula launched an economic plan for the first year of government. Throughout the week, the president presented a package of investments and benefits that should be seen as a shortcut to contain a slowdown in the country at the start of the third term.
One of the goals of the petista is to reissue an injection of money into the economy to stimulate consumption, as in previous governments. Lula drew expectations at two events in recent days, when he announced his intention to resume more than 14,000 works at a standstill in the country.
“Each of these works will generate a number of jobs. These jobs will enable cities to have stronger commerce, and this stronger commerce will grow to the extent that there are more jobs, in which there are more wages,” declared the president, in Sergipe.
The option for works that have already started was the path chosen by the government to cut the path of bidding and licensing, meaning that the stimulus measures may have short-term effects on local activities and the job market.
The increase in the minimum wage and the expansion of the Income Tax exemption, confirmed by Lula to CNN, aim at the same target. Budget restrictions meant that the readjustments were lower than expected, but the PT consider that the decisions have an immediate symbolic impact on their base.
These changes were already in Lula’s plans, but the president managed to break resistance within the government and anticipate the announcements after hammering home the risk that the current level of interest rates represents for the economy in 2023.
On the eve of Lula’s interview, one of the main advocates of this agenda connected the two points. The PT president, Gleisi Hoffmann, reinforced the bet on consumption and stated that a stimulus package was urgent. “We need money in the hands of the people to avoid the interest rate slowdown,” she wrote.
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