Minimum wage should reach R$ 1,429 in 2024 and generate an increase of R$ 15 billion in expenses, says Fiscal Institution

[ad_1]

Calculation by the Independent Fiscal Institution considers the salary floor correction formula announced by the government this week. The project will still be analyzed by Congress. With the new correction formula announced by the government, which still needs to be approved by the National Congress, the minimum wage should reach R$ 1,429 in 2024 and generate an increase in mandatory spending of around R$ 15 billion. The calculations were made by economist Vilma Pinto, director of the Independent Fiscal Institution (IFI), a body linked to the Federal Senate, at the request of GloboNews and g1. According to the Minister of Labor, Luiz Marinho, the government is going to present a Bill to Congress resuming the policy of real valuation (above inflation) of the minimum that was in force in other PT administrations. The formula takes into account the inflation of the previous year, measured by the INPC, plus the variation of the Bruno Domestic Product (GDP) of two years before. In the case of 2024, the IFI projections take into account an INPC of 5.16%, the same percentage predicted by the government in the proposed budget guidelines for next year, and the GDP variation for 2022, which was 2. 9%. With that, the minimum wage would go from R$ 1,320 – a value that will be in effect from May – to R$ 1,429. The final number for 2024, however, may still change, if the projection for the INPC changes. In the budget guidelines project for 2024, the government predicted that the salary floor would be R$ 1,389, because it considered only the correction for inflation, without a real increase. This year’s minimum wage is currently at R$1,302, but the government has promised to publish a provisional measure increasing the amount to R$1,320 starting in May. Impact on mandatory spending The strong impact of the minimum wage readjustment on public spending is due to the fact that the wage floor is linked to a series of assistance benefits and Social Security. That is, when raising the floor, part of the assistance and social security benefits is readjusted in the same proportion. Of the approximately BRL 15 billion increase in mandatory expenses forecast for 2024 due to the probable real readjustment of the minimum wage, according to the IFI: BRL 10.6 billion are linked to Social Security BRL 2.7 billion to assistance benefits BRL 1 .6 billion to the Worker’s Support Fund (FAT) Fiscal targets The increase in mandatory expenses should be another complicating factor for the federal government to reach the targets that were established in the new fiscal framework, which also depends on congressional approval. The economic team signaled that it intends to eliminate the public deficit in 2024 and register a surplus (that is, collect more than it spends, without considering the payment of interest on the debt) in 2025 and 2026. The fulfillment of these goals, however, depends on a strong revenue increase. The Minister of Finance, Fernando Haddad, signaled that up to R$ 150 billion in increased revenues would be needed in the coming years to enable compliance with these fiscal targets.

[ad_2]

Source link