RIO DE JANEIRO, Jan 30 (Reuters) - Brazil’s government will raise the minimum wage to 465 reais ($200.95) a month in 2009, Labor Minister Carlos Lupi said on Friday, injecting more than 21 billion reais in Latin America’s largest economy.
Adjusting for inflation, the minimum wage will rise 6.39 percent from 415 reais and the increase will take effect on Sunday, which is Feb 1.
The minimum wage has risen around 46 percent since President Luiz Inacio Lula da Silva came to power in 2003.
“This is an important means to heat up the Brazilian economy,” Lupi said. “It represents more people with money in their pockets and this means more consumption, more sales, more production and more jobs.”
Lula made the eradication of poverty a cornerstone of his administration. By raising the minimum wage above inflation and increasing government handouts, the government has lifted millions of Brazilians out of destitution in recent years.
Lupi said 42.1 million Brazilians would benefit directly from the adjustment, including pensioners and retirees.
Still, analysts say the higher minimum wage may add pressure to Brazil’s deteriorating fiscal accounts since the government increases public pensions in tandem with the salary increases.
Lupi also expects the rise in the minimum wage to contribute between 0.1 percentage point and 0.2 percentage point to Brazil’s gross domestic product growth this year.
Brazil’s economy is expected to slow to 2 percent from 2008 growth above 5 percent. ($1=2.314) (Reporting by Rodrigo Viga Gaier; Writing by Ana Nicolaci da Costa; Editing by Jan Paschal)