Brazil president Luiz Inacio Lula da Silva is intent on helping the flagging Brazilian economy by injecting $15.1 billion into the housing industry. According to Bloomberg, the Brazilian government will build one million new homes for the country’s low income earners.
Currently the situation is dire as local companies cut costs to weather the global crisis. The emergency program is supposed to help boost the Brazilian market and help people survive the recession.
Low income earners will be supposed to pay a symbolic contribution to take on home ownership and people who earn less than 2,790 reais will be eligible for government subsidies.
Since the crisis wielded its first signs in Brazil nearly a million government registered jobs have been slashed, leaving many without income or a roof over their heads.
The announced program has seen an increase in the shares of real estate companies after the news were announced. Further to this, the plan will help to create an estimated 700,000 new jobs to help in the construction process.
The idea is to have the new homes build by 2011 which will help to jump-start Brazil’s economy. Brazil’s Finance Minister Guido Mantega said it could generate as many as 1.5 million new jobs, citing a study by the Getulio Vargas Foundation.
The “grand plan” will be funded from the government’s budget and the federally backed FGTS retirement fund. Subsidized loans for low and middle-income families will provide them with affordable mortgages giving them a chance ta home ownership.
Since the program has been made public many have labelled it an emergency response from the Brazilian government to the global crisis.
Industries which find it hard going in times like these have already been provided with tax breaks and increased lines of credit to help them survive the current situation.
Business leaders and residents of Brazil have all taken these news as a positive sign to help boost the flailing economy which shrank 3.6 percent in the last quarter of 2008.
“There is no doubt this is a bold program and of great impact on the Brazilian economy. For sure it will be one of the main anti-crisis programs this government will launch,” said Mantega as the announcements were being made.
Photo credits: World Economic Forum via Flickr