Brazil may extend emergency payments to poor until end of year: Bolsonaro

imageEconomy4 hours ago (Aug 19, 2020 05:50PM ET)

(C) Reuters. FILE PHOTO: Brazil’s President Jair Bolsonaro looks on during a press statement at the Alvorada Palace in Brasilia

By Maria Carolina Marcello and Marcela Ayres

BRASILIA (Reuters) – Emergency payments to Brazil’s poor could be extended through the end of the year, President Jair Bolsonaro said on Wednesday, but at a lower rate than the current 600 reais ($108) a month.

The payments are widely cited as one reason why the economy appears to have recovered from the depths of the coronavirus crisis more quickly than many had expected, but are due to expire next month.

The government and the country at large are debating whether the payments should be extended and by how much, given the parlous state of public finances.

Bolsonaro said continuing with 600 reais a month is not an option as that would jeopardize Brazil’s fiscal credibility. At the same time, one of the proposals put forward by the economy ministry, of 200 reais a month, is not enough.

“We can reach a middle ground and we will try to extend it for a few more months, perhaps until the end of the year,” Bolsonaro said in Brasilia alongside Economy Minister Paulo Guedes.

Guedes again insisted that the government cannot afford 600 reais a month, but said it will do all it can within its means to extend the program that has reached 64 million Brazilians.

The aid package costs the government more than 50 billion reais a month.

Meanwhile, Guedes said the economy is recovering in the shape of a Nike (NYSE:NKE) “swoosh”, and that a program to help finance company payrolls will more than double its reach in the coming months to over 200,000 companies.

Guedes also said 200 billion to 300 billion reais of credit will be made available to small businesses by the end of the year.

Brazil may extend emergency payments to poor until end of year: Bolsonaro

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