Brazilian President Michel Temer on Wednesday signed legislation that will effectively free up some R$39.3 billion in blocked funds for millions of Brazilian wage and salary earners. The funds are locked up in two government programs dating back to the 1970s, the PIS social welfare fund for private-sector workers and PASEP for government employees. Typically, the funds are only made available to workers under strictly controlled circumstances such as a major illness, retirement or unemployment. Under legislation signed Wednesday, all holders of such funds can freely make withdrawals through September 28. The government estimates such withdrawals at R$39.3 billion. The move is a frank effort to kick-start Brazil’s stalled economy. According to the Planning Ministry, most of the withdrawn funds will flow directly into consumer spending. The ministry estimates the decision will boost Brazilian GDP by an additional 0.55% this year. Brazil’s economy is currently in the doldrums, with 2018 GDP growth estimated at about 2.0%. Growth last year was only 1.0% and followed two years of recession.
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