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[BUSINESS] · Brazil · 46 sources

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Brazil interior economy faces risk from social benefit cuts

A study by the Center for Research in Macroeconomics of Inequality (Made) at the University of São Paulo (USP) warns that the stagnation or reduction of social and pension benefits could trigger a severe economic contraction in Brazil's interior municipalities.

Research indicates that programs such as Bolsa Família, the Continuous Cash Benefit (BPC), and various pensions are vital to these economies, often accounting for nearly half of the budget for the poorest families. In these regions, funds are typically used immediately for essential goods, creating a multiplier effect that supports local commerce, maintains jobs, and ensures municipal tax revenue.

In the state of Ceará, for example, social and pension transfers represent 22% of the aggregate income in the capital and metropolitan area, but this figure rises to 40% in interior cities. The study projects that without real adjustments to these benefits, aggregate income in the country's interior could fall between 6.8% and 10.8% over the next three years compared to scenarios with real value increases.

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Benefício de Prestação Continuada · Bolsa Família · Brazil · Ceará · Luiza Nassif · Made-USP · University of São Paulo

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