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Brazil adds almost 500,000 households to flagship aid program

The Brazilian government this week added over 480,000 households as recipients of Auxílio Brasil, its flagship cash-transfer program. Aid beneficiaries now add up to over 21.3 million households. The number represents an increase of 2.3 percent from September.

Auxílio Brasil currently pays monthly cash stipends of at least BRL 600 (USD 114). Under current legislation (part of the electoral measures implemented by the Jair Bolsonaro government), this value will only last until December, reverting back to the original BRL 400 in January.

Among Brazil’s five regions, the Northeast has the largest number of aid recipients.

In all nine of the Northeastern states, former president Luiz Inácio da Lula da Silva received more votes than incumbent President Bolsonaro in the first round of the elections on October 2. However, Mr. Bolsonaro got 1.3 million more votes in the region than in the first round of 2018. This accounts for about 80 percent of his total absolute increase nationally.

bolsonaro aid northeast

The government also moved forward the payment schedule for Auxílio Brasil this month. Originally, payments were due to be made from October 18 to 31. Now all payments were made by the 25th of the month, ensuring cash transfers are handed out before the runoff on October 30.

Separately, financial institutions were authorized to offer payroll deduction loans to beneficiaries of Auxílio Brasil starting on Monday. Multiple experts, however, raised concerns about the possible side-effects of extending credit to lower-income families at much higher rates than those offered to federal civil servants or private workers.

Recent data from the Central Bank shows that the country’s household indebtedness levels reached 53.1 percent in July, a new record (in the data series starting in 2005), with almost one-third of families’ monthly income being eaten up by debt payments.

Moreover, Brazil has, since 2021, one of the world’s steepest5 monetary percent tightening processes with benchmark interest rates climbing from 2 percent a year to the current 13.13.

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