Brazil’s government on Wednesday set a new minimum monthly salary level, valid starting January 1. The new minimum will be R$880 per month, representing an 11.6% hike from the 2015 level of R$788. The hike follows the current law, which calls for an annual increase in the minimum salary equal to previous-year inflation plus economic growth from the year before that. Inflation in 2015, as measured by the INPC indicator, was 11.5%. Economic growth in 2014 was 0.1%. The increase in the minimum salary will have a direct impact on government spending since many benefits are directly linked to it. The government estimates the 2016 impact at R$30.2 billion. That figure is R$2.9 billion higher than the impact projected under the 2016 federal budget approved earlier this month by Congress. The government will have to find a way to compensate for the R$2.9 billion via cuts in other segments of the budget or additional revenues sources.
Link to government news agency release.More Testimonials