Brazil May Increase Minimum Wage to 622.73 Reais in 2012

Brazil’s government raised its minimum wage forecast for next year to 622.73 reais ($344) a month from 619.21 reais, according to complementary information on the 2012 budget plan sent yesterday to congress.

The increase will raise the country’s average wage by 3 percent, Carlos Hamilton, the central bank director for economic policy, said in Belo Horizonte today.

The minimum wage is adjusted by a formula agreed to by unions and President Dilma Rousseff’s predecessor, Luiz Inacio Lula da Silva, depending on inflation and economic growth.

The increase “shouldn’t be a problem regarding inflation, which will remain above the center of the central bank’s target,” said Andre Perfeito, chief economist at Gradual Investimentos. The bank targets an annual inflation rate of 4.5 percent plus or minus two percentage points.

The minimum wage is currently 545 reais.

The real was little changed at 1.8078 per dollar at 10:13 a.m. New York time from 1.8069 yesterday.

To contact the reporters on this story: Maria Luiza Rabello in Brasilia at mrabello@bloomberg.net; Telma Marotto in Sao Paulo at tmarotto1@bloomberg.net.

To contact the editor responsible for this story: Philip Sanders in Santiago at psanders@bloomberg.net.

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