The advance payment of the 13th salary for retirees and pensioners of the National Institute of Social Security (INSS) for the months of April and May 2023 was confirmed, seeking to strengthen the economy.
The action, which aims to encourage consumption and promote economic growth, was made official through a decree published in the Official Gazette of the Union.
The payment, which would only be made at the end of the year, is a government strategy to boost the economy, while contending with signs of slow economic activity.
Benefits to consumption and the economy
Around 33 million INSS beneficiaries will receive their thirteenth salary early. This represents an injection of around R$66 billion into the economy.
Despite this, it is worth remembering that these amounts are not additional, after all, the benefit would be paid anyway at the end of the year.
The economy gains momentum
Even with the slowdown in economic growth – financial market projections compiled by the Central Bank point to growth of 1.8% in 2023, compared to 2.9% in 2022 – there are favorable factors.
A buoyant labor market and the resumption of payment of court orders contribute to the positive scenario for consumption. This is the bet of Fábio Bentes, senior economist at the National Confederation of Commerce of Goods, Services and Tourism (CNC):
“It is not a new resource, but the measure tends to have a greater effect this year than on other occasions. Some vectors help to stimulate the economy a little more.”
Fábio Bentes, senior economist at the National Confederation of Trade in Goods, Services and Tourism (CNC)
The 2022 census and the Brazilian population
The 2022 census showed an older and more feminine Brazil. The population aged 65 or over grew by 57.4% in just over a decade.
This highlights the relevance of measures such as the advance payment of the 13th salary for retirees and pensioners.
Unemployment down and wages rising
The favorable scenario for consumption is also reflected in the labor market. In the three-month period ending in January, the unemployment rate was 7.6%, one of the best moments in the historical series of IBGE, observed in 2014.
On average in 2023, labor income increased by 7.2% compared to 2022. However, even with the improvement in the labor market, economist Silvia Matos, coordinator of the Macro Bulletin, from the Brazilian Institute of Economics of the Getulio Vargas Foundation (FGV Ibre), warns of the risk of inflation resulting from wage pressure.
Current dynamics and the future
Finally, there is cautious optimism regarding the positive impacts on consumption resulting from the resumption of court-ordered payments, but the degree to which this additional injection of capital will be directly translated into consumption is still uncertain. Despite the challenges, the outlook is for more balanced growth that is less dependent on specific sectors.
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