End of emergency salary leads to massive savings withdrawals

savings pandemic
Photo: Michael Jay Berlin/Shutterstock

Since the beginning of the pandemic, Brazilians have paid more attention to saving money. But with the end of the government-sponsored coronavirus emergency salary program — a BRL 600 (USD 110) monthly stipend created in March 2020, halved in September, and made extinct in December — withdrawals from savings accounts reached a 26-year peak.

According to the Central Bank, the balance of savings accounts in January was negative BRL 18.1 billion (USD 3.3 billion).

The government and Congress are already considering extending the cash-transfer program for another three months, with monthly payments of BRL 200.

In neighboring countries Peru and Colombia, the economic effects of the pandemic led to similar consequences and citizens withdrew excessive amounts of money from their pension funds. Millions in the continent have now emptied their retirement savings.