LDO: Correction of the minimum and INPC variation could impact R$51 billion
The LDO establishes the rules for the preparation and execution of the Union Budget, to maintain the balance of public accounts.
The minimum wage is used as a reference for Social Security benefits, unemployment insurance and the PIS/Pasep salary bonus. The INPC is used to correct social security benefits above the minimum wage.
Newton Marques, economist and member of Corecon-DF, points out that Brazil is a country with “great” social and economic inequality, therefore, there needs to be public policies that correct this concentration of income.
“The study shows that these corrections for 2025 will impact more than 50 billion in government accounts, at all levels, federal, state and municipal. This is a fact. In short, Congress or the government itself will have to offer alternatives for these expenses to happen. The economy has to support it, because these expenses can generate an increase in employment and income in the next moment”, he explains.
Adjustment of the minimum wage
For 2025, government projections estimate that the minimum wage will be adjusted from R$1,412 to R$1,502. The value is based on an accumulated INPC of 3.35% until November 2024, added to economic growth of 2.9% in 2023.
For André Galhardo, economic consultant at Remessa Online, the real adjustment of the minimum wage is important, especially for the population with lower purchasing power, which is “very linked” to the consumption of energy, food and transport.
“By just replacing the INPC variation, you are taking away the purchasing power of the population as less purchasing power, you are taking away the purchasing power of retirees, older people. I think that the social interests of the real increase in the minimum wage override the fiscal issue, which is also important”, she states.
However, he states that it is “important” to find a way to bring public accounts back into balance. For Galhardo, there are other places to act, without harming the lives of the most vulnerable population.
Fernando de Aquino, economist and member of Cofecon’s economic policy committee, points out that public debt has remained “behaved” for several years in Brazil. Therefore, in practice, he states that there is no reality of “explosion” or fiscal abyss.
“The situation of overshooting (movement in the market that exceeds expected equilibrium points), these market reactions, in general, have an unfavorable impact on the real economy. It’s not a good thing that happens. So we need to have public spending and revenue management, to avoid these exaggerated reactions in the market”, he informs.
He points out that pension spending can have an explosive trajectory in the long term, so there is time to make adjustments.
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By Brasil 61
