Brazilian government still undecided on public salaries, official says

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BRASILIA, April 18 (Reuters) - Brazil's government has not yet reached a decision over a salary increase for public servants this year, an official said on Monday, stressing that an across-the-board 5% wage increase was just one proposal on the table.

Last week, Economy Ministry sources said the government had reach a decision to grant a 5% increase to all civil servants, starting in July, in an attempt to end protests and strikes affecting public services. read more

"Everybody wants more, (but) a 5% adjustment is already a considerable fiscal effort, and it is not decided," Special Treasury and Budget Secretary Esteves Colnago told a news conference on Monday.

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That measure would cost the federal government 6.3 billion reais ($1.35 billion) this year and 12.6 billion reais next year, Colnago said. For now, the government has set aside 11.7 billion reais in the 2023 budget bill for higher salaries.

Colnago also suggested that the government should reconsider a rule automatically adjusting the minimum wage to compensate for inflation every year, saying that Congress should decide the matter instead.

Treasury Secretary Paulo Valle told journalists that state development bank BNDES is expected to return 13 billion reais to the Treasury "in the short term."

Another 17 billion reais may follow this year, with 68 billion reais coming in following years, he said.

Between 2008 and 2015, the Brazilian Treasury transferred more than 500 billion reais to the development bank, weakening public finances and squeezing commercial lenders out of capital markets. In recent years, the bank has pursued a policy of returning these loans to the Treasury.

($1 = 4.6760 reais)

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Reporting by Marcela Ayres; Editing by Pravin Char

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