The wealthy should gain more from Lula's government's advisory projects

The wealthy should gain more from Lula's government's advisory projects

Unlike the first presidential administrations Luiz Inacio Lula da SilvaSince migrations from categories D/E to category C were recorded between 2003 and 2010, the richest (categories A and B) should benefit the most in the current administration.

This is because, according to the information published in the newspaper Folha de sPaulo on Sunday 14th of this month: High interest rates, low economic dynamism, and limited space in the general budget for income transfers to the poorest groups will mean that the upper classes enjoy higher incomes.

Forecasts by consultancy Tendências reveal that Class A will have the largest increase in real income (above inflation) in the period 2024-2028: 3.9% per year – which has already happened in 2023. Class D/E, on the other hand, will They have a smaller development, at 1.5%, on average.

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The income block consists of the sum of income from work and transfers from Bolsa Familia And social benefits, from pension And other sources of income such as interest and dividends.

The capital gains of the rich, entrepreneurs or people with invested money will make a difference. Although there are expectations of some decline in the base interest rate, the Silicia interest rate, currently at 10.75% per annum, should remain relatively high.

Today, it is possible to obtain 6% annually above the inflation rate with conservative financial investments; In 2023, interest expenditures on public debt total R$718.3 billion. By comparison, Bolsa Familia allocated R$170 billion to 21.1 million families.

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In the case of the D/E category, the consulting company does not see, in the coming years, generous correction rates for the Bolsa Familia program nor the minimum wage due to the limited fiscal space available to the Lula 3 government.

This is the opposite of what happened between 2003 and 2010, when the country benefited from three factors: structural reforms under the FHC government (1995-2002), strong growth in the global economy and economic growth. bubble In prices Goods Exported from Brazil.

Young people feel stagnant in Lula's government

According to Lucas Assis, a macroeconomic analyst at Tendências, the elements that encouraged the migration of millions of individuals from categories D/E to category C during the 2000s led to increased formalization of employment and increased income from work, which in turn led to enhanced Federal system. revenues and contributed to an average GDP growth of 4% for several years.

“During that period, the government had room in the budget to adjust the Bolsa Familia program and give stronger real increases to the minimum wage, which benefited the D/E category,” he said. “This time, that does not seem possible. The economy and income must grow, but more slowly.”

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In this context, categories B and C, which are more dependent on income from work, will also have a lower income increase than A's.

In an interview with BoundIn any case, the lower classes were favored at the beginning of the Lula 3 government with the expansion of Bolsa Familia coverage, which began during the government of Jair Bolsonaro, highlighted Mauricio de Almeida Prado, CEO of Plano CDE Consulting.

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Between December 2019 (before the pandemic) and December 2023, the number of beneficiary families increased significantly, moving from 13.2 million to 21.1 million, an increase of 60%. Moreover, the value of monthly payments also registered a significant increase, rising from R$2.1 billion to R$14.2 billion, respectively.

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Although the lives of these people improved as the utility expanded, Prado points out that development stopped. He added: “The guy from Grade C didn’t look back, but he didn’t have a next step.” “For the elderly, life is better after they left D/E a long time ago. But among the young, there is a feeling of stagnation.”

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About the Author: Camelia Kirk

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