The new rate, which will come into effect on January 1, represents a 7.5% increase over the rate in effect this year, and the decree will be published on Tuesday in the Official Gazette of the Union.
President Luiz Inácio Lula da Silva signed a decree on Monday establishing a new minimum wage for 2025 of 1,518.00 reais (US$ 244.6), the Planalto Palace reported.
The new rate, which will come into effect on January 1, represents an increase of 106 reais (7.5%) compared to the rate in effect this year, and the decree will be published on Tuesday in the Official Gazette of the Union.
The new figure is in line with a law passed by Congress this month that capped the annual real adjustment of the minimum wage at 2.5% until 2030. The initiative was part of a package of fiscal measures presented by the government at the end of November and brought the minimum wage increase rule into line with the spending growth limits set out in the fiscal framework, which provides for a minimum increase of 0.6% and a maximum of 2.5%.
With the reactivation of the minimum wage appreciation policy by the government of President Luiz Inácio Lula da Silva, its value began to be updated according to the variation in inflation measured by the INPC accumulated in 12 months until November and the increase in GDP two years earlier.
According to this rule, the current value of 1,412.00 reais in 2024 should have been corrected in January by 3.2% (GDP growth in 2023), after a correction for inflation of 4.84%, but this real increase was now limited to 2.5%.
The adjustment to the minimum wage readjustment rule has an impact on government finances, since a significant portion of pensions and social benefits are indexed to the minimum wage. The government estimated savings of R$35 billion until 2030 with this change. For 2025, the impact was calculated at R$2.2 billion.
Lula will work to reach an agreement between Mercosur and UAE
Brazilian President Luiz Inacio Lula da Silva told his Emirati counterpart on Monday that Brazil will work to seal a deal between South American trade bloc Mercosur and the United Arab Emirates (UAE) in the coming months.
The Brazilian presidency said in a statement that Lula and Sheikh Mohammed bin Zayed Al Nahyan spoke by phone for about half an hour on Monday, adding that Lula expressed his enthusiasm in the Mercosur region for an economic partnership with the UAE.
