Federal government begins aid payouts to states and municipalities

Federal government begins aid payouts to states and municipalities
Photo: Andrzej Rostek/Shutterstock

The Brazilian federal government announced the beginning of a financial aid program to states and municipalities aimed at offsetting tax revenue losses and increased health spending. 

The first installment, paid on June 9, provides BRL 9.3 billion (USD 1.9 billion) to the 27 Brazilian states, and BRL 5.7 billion to municipal governments. Only five of Brazil’s 5,570 municipalities did not receive the financial help due to delay in responses to the National Treasury and disputes over their rights to future legal action against the federal government over the Covid-19 crisis.  

The aid will run for three additional months, totaling BRL 60 billion over four installments. The measure was agreed upon between Congress and the Executive in May as a way of mitigating tax revenue losses during the period of slow economic activity caused by the pandemic – a trend expected to continue despite the ongoing gradual reopening of the Brazilian economy.

As previously reported by The Brazilian Report, bids to reopen the economy countrywide have failed to regain momentum, as pessimism among Brazilians about an economic recovery has led to consumer mistrust and a fear of returning to pre-pandemic purchasing habits.

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