Brazil’s lower house of Congress just passed an overhaul of the struggling economy’s pension system.
The overhaul passed by a much larger margin than expected in a victory for Brazil’s new administration, which has promised to restore public finances in the country.
The lower house passed the first texts of the pension bill by 379 against 131, well over the 308 votes which were required to pass the bill. This first vote on the main text of the wider pension bill will be followed by a few more steps before the bill would be put into effect. House speaker Rodrigo Maia said he hoped the complete bill could be put to a second vote on either Friday or Saturday. This would allow the Brazilian senate to have their debate on the bill after a two-week recess in August.
The Brazilian economy has taken a turn for the worse during the last few years. The previous decade saw Brazil lauded as one of the most promising emerging economies in the world, along with Russia, India, China, and South Africa (BRICS). After a decade of healthy economic growth (with the exception of the 2008 crash), Brazil’s economy has slowed down significantly, and even contracted in 2015 and 2016. There currently doesn’t seem to be a clear solution in sight as the unemployment problem grows, sitting at 12.7% for the first quarter.
Pension reform is at the core of the new administration’s agenda as they aim to save the economy $263 billion over the next decade. Closing the massive budget gap will likely be the first thing on the mind of Brazilian leadership for the next few years, regardless of who’s in charge.