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Brazil government readies $32 billion of economic stimulus -sources -Breaking

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© Reuters. FILE PHOTO – A vendor sells eggs in a Rio de Janeiro street market on July 8, 2021. REUTERS/Amanda Perobelli/File Photo

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By Lisandra Paraguassu and Bernardo Caram

BRASILIA (Reuters – Brazil’s federal government intends to announce Thursday a program offering 165 billion reais ($32billion) of economic stimulation during this election year. This was confirmed by three sources familiar with the matter.

According to sources speaking under condition of anonymity, the so-called “Income and Opportunity Program” includes an earlier payment of certain public pension checks. It also allows workers to withdraw cash from a severance account known as FGTS. A new microcredit program is being developed, and a broader range of payroll-deductible loans are available.

The ministers stated that at least 30 million reais would be released by FGTS. This will allow for as much as 1,000 reais per worker. Economy Minister Paulo Guedes already said this was possible.

The administrations of Jair Bolsonaro, and Michel Temer before him had taken measures to release these funds. In normal situations money cannot be withdrawn from FGTS unless a worker dies, gets fired or is looking to buy property.

Sources said that the government would also move forward payment of certain public pension checks. This is a repeat of a decision taken during the coronavirus pandemic in 2021 and 2020. Pensioners will receive the July payment before October’s elections.

Bolsonaro who is widely believed to be seeking re-election is currently in the lead according to opinion polls behind ex-leftist President LuizInacio Lula Da Silva.

Sources said that the creation of microcredit programs and expansion of payroll-deductible loans are intended to give workers access to funds that can be used to invest in small businesses.

($1 = 5.0949 reais)

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