Nearshore Americas

Study: Brazil’s Spending on Social Welfare Doubles Over Course of 16 Years


Brazil’s investment in social welfare, such as education and healthcare, increased to 638.5 billion real (US$ 315 billion) in 2010 from a mere R$ 234 billion (US$115 billion) in 1995, according to a study conducted by Brazil’s Institute of Applied Economic Research (IPEA).

That means federal social spending more than doubled in a span of 16 years, from 726 USD per person in 1995 to USD 1642 in 2010, taking the total amount of spend on social welfare to 315 billion USD.

This indicates 172 percent increase in social spending, but the figure did not take into account population growth during the same period.

The social spending has taken into account eleven social areas, including general welfare, benefits to civil servants, health, social assistance, food and nutrition, housing and urban planning, sanitation, employment and income, education, rural development and culture.

“What has raised Brazil’s social spending per capita is not only the increase in the minimum wage, but also the federal government’s investment in education, infrastructure, housing and sanitation, and public health,” said IPEA’s director of Social Studies and Policies Jorge Abrahao.

Given the report, Brazil’s investment in social welfare accounted for 15.5 percent of the country’s GDP in 2010 from 11.24 percent in 1995.

IPEA’s analysis used the value of the Brazilian real in December 2011 as reference, discounting inflation measured by the National Consumer Price Index (IPCA).

Brazil increased public spending dramatically in 2008 following the onset of global financial crisis. IPEA says the growth trajectory, although permanent, was not homogeneous.

“The data shows that a significant increase in social spending occurred from 1995 to 2003, and since 2004 it has undergone extensive inflection, greatly accelerating its trajectory,” the study reports.

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Social spending per capita grew by 32 percent in real terms in the first half of the series (1995-2002), and by 70 percent in the second half (2003-2010). But Brazil accelerated social spending soon after the Lehman Brothers collapsed in the United States triggering global financial crisis.

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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