Brazil Approves 2026 Minimum Wage Increase Amid Legislative Budget Controversy
Brazil announces a 6.79% minimum wage increase for 2026 while Pernambuco's legislative assembly clarifies a veto rejection on the 2026 budget law was a legal decision, not political.
- • Brazil's minimum wage set at R$ 1,621 for 2026, a 6.79% increase.
- • Increase based on 4.4% inflation and 2.5% GDP growth, with real raise capped at 2.5%.
- • ALEPE rejects veto on 2026 budget law as a technical-legal decision, not political.
- • Veto aimed to block amendments, undermining legislative authority and constitutional order.
Key details
The Brazilian government has officially announced a minimum wage increase for 2026, setting the new salary at R$ 1,621, effective January 1, 2026, marking a 6.79% rise or R$ 103 increase from the current R$ 1,518. This adjustment affects approximately 59.9 million Brazilians, including formal workers, retirees, and those receiving social benefits tied to the minimum wage, according to the Departamento Intersindical de Estatística e Estudos Socioeconômicos (Dieese).
The wage hike was determined based on inflation and GDP growth metrics, with the inflation rate at 4.4% and GDP growth at 2.5% for 2024. However, a law passed in December 2024 restricts real wage increases to 2.5% to align with fiscal spending limits, resulting in the revised minimum wage being slightly lower than the March 2024 projection of R$ 1,630.
Simultaneously, the Legislative Assembly of Pernambuco (ALEPE) clarified a recent veto rejection regarding the 2026 Annual Budget Law (PLOA 2026). ALEPE stated the refusal of Veto Message No. 68/2025 was a technical-legal decision, not a political gesture. The Assembly highlighted that the veto had a “manifest incompatibility” with constitutional order and was based on an insuperable origin flaw, leading to its immediate rejection to preserve the legislative process.
ALEPE emphasized that the veto aimed to reject the sanctioning of budget amendments, potentially allowing the budget to pass without resource allocation reflect amendments approved by parliament. This, ALEPE warned, would undermine parliamentary deliberation and violate the constitutional separation of powers. The Assembly defended its proper technical and parliamentary procedure and rejected claims suggesting political motivations or lack of legal basis for their decision.
The note further defended Deputy Antônio Coelho against personal attacks and underscored the importance of opposition in a healthy democracy, reaffirming ALEPE’s openness to institutional dialogue while reiterating its commitment to constitutional duties.
These developments reflect Brazil’s ongoing balance between fiscal discipline and legislative oversight as the government and parliament finalize the 2026 budget and wage policies, which impact millions of Brazilians.
This article was synthesized and translated from native language sources to provide English-speaking readers with local perspectives.
