*Brazil’s President Luiz Inácio Lula da Silva and Labour Minister Luiz Marinho have signed a decree to temporarily release some funds from the Fundo de Garantia do Tempo de Serviço (FGTS), a public fund that covers severance pay packages to employees. The FGTS fund receives monthly contributions from employers and has a rule which allows employees to make withdrawals from their accounts tied to the fund once a year, on the month of their birthday. The government’s latest measure has authorised the release of R$12bn (US$2.03bn) from the FGTS. These funds will be paid to workers who lost their jobs between 1 January 2020 and 28 February 2025 and will be released in two tranches, in March and June. This latest release of funds bypasses the birth month withdrawal rule, but the government has highlighted that the rule has not changed; this is just a one-off payment. However, some economists cited in the national media have criticised the Lula government for enacting what they consider to be a popularity-boosting measure that will only add to long-running concerns that Brazil’s economy could be overheating due to government policies that are driving up consumer confidence and aggregate demand.
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