By Lisa Flueckiger, Contributing Reporter
RIO DE JANEIRO, BRAZIL – The Ministry for Planning, Budget and Management has announced its draft budget for 2014, which previews a 6.64 percent increase in Brazil’s minimum wage. This adjusts the salary to this year’s inflation rate. The economy is expected to grow by four percent in 2014.
In the draft budget law that was handed to Congress by the Minister for Planning, Budget and Management, Miriam Belchior, yesterday, the minimum wage would be lifted from R$678 to R$722.90. This would result in an additional R$29.2 billion in public spending.
Inflation is expected to be around five percent in 2014, and therefore still above the government’s 4.5 percent target for next year.
Investments in the draft budget total a R$186.6 billion, of which R$63.3 billion are destined to the government’s Programa de Aceleração do Crescimento (PAC) investment program, an increase of 21.1 percent compared to 2013. PAC will be additionally supported by R$72.7 billion from the states.
However, some ministries will see their funding reduced, such as the Ministry of Sports, with a budget of R$153.2 million; Ministry of Environment with R$3.1 million and the Ministry for Tourism with R$123.5 million. In total, the discretionary spending of all Ministries together lies at R$266.2 billion.
The Minister of Finance, Guido Mantega, described the draft budget overall as conservative. According to him, estimates of revenue, especially regarding dividends and royalties, were made cautiously. The draft budget is now subject of approval by Congress, which should decide on the bill within the year. However, last year’s budget was only approved in early 2013, 71 days after it had been scheduled to pass.
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