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Brazil government proposes 7.5% hike in minimum wage

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Staff writer ▼ | April 19, 2016
Brazil worker
LatAm wages   The initiative to boost minimum pay

The Brazilian government proposed a 7.5 percent increase in the minimum wage effective next January.

The initiative to boost minimum pay from 880 reais ($251) to 946 reais ($270) a month in 2017 is included in the set of budgetary guidelines released by the Finance Ministry. Brazil adjusts its minimum wage annually based on the rate of inflation.

Looking ahead, the proposal calls for increasing the monthly minimum wage to 1,002 reais ($286.20) in 2018 and to 1,067 reais ($304.80) in 2019. The document includes projections for economic growth and inflation.

The government expects Brazil’s gross domestic product to shrink 3.1 percent this year following a contraction of 3.8 percent in 2015.

Latin America’s largest economy has not experienced two consecutive years of contraction since 1930.

Brazilian GDP will expand by 1 percent in 2017, according to the Finance Ministry, which forecasts an inflation rate of 7.5 percent in 2016, easing to 6 percent next year.

Private economists predict GDP will retreat 3.77 percent this year, with inflation of 7.14 percent.

The release of the economic assumptions and minimum wage proposal coincided with the first of three days of debate in the lower house of Congress on a motion to impeach President Dilma Rousseff.

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