Poorest 50% of Brazilians to Get 15% of the GDP

The share of the country’s total income allotted to the poorest half of the Brazilian population should improve this year. A study released yesterday, June 5, by Brazil’s National Economic and Social Development Bank (BNDES) estimates that 15.1% of the country’s Gross Domestic Product (GDP) will go to the poorest 50% of the population in 2006. Their share was 13.2% in 2002.

The figures indicate a technical improvement in national income distribution. This is not a new phenomenon, since it has been evident since the beginning of the decade of the 1990’s, according to the BNDES. The difference is the accelerated pace of improvement between 2003 and 2006.

If the BNDES estimate proves correct, the poorest half of the Brazilian population will have experienced an annual increase of 0.53% in their share of total national income between 2003 and 2006, as against an average annual increase of only 0.12% between 1993 and 2002.

According to the president of the BNDES, Demian Fiocca, the change is largely due to the increase in the real value of the minimum wage and income transfer programs, such as the Family Grant.

That is why social programs are as important for the country as long-term policies, such as education and health, he explains.

"Direct transfer programs are like a third leg. If education represents one basic leg and health, another, direct transfer programs should be part of this tripod," Fiocca observed.

According to Fiocca, the annual increase in the minimum wage amounted to 5.9% in real terms between 2003 and 2006.

The Family Grant, for its part, benefited 8.7 million families at the end of 2005, and the federal government estimates that it will reach 11.2 million families by the end of 2006.

Agência Brasil

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