Brazil’s lower house of Congress has approved a government-backed proposal to limit an increase in the country’s minimum wage to 545 Brazillian reais ($326) a month. Reuters says the Senate is expected to also approve the proposal when it votes on it next week.

The approval of the proposal is the first major legislative victory of President Dilma Rouseff and is key to her plans to cut some USD30 billion off Brazil’s spending this year. State funded pensions are indexed to the country’s minimum wage and every dollar in wage hike costs the government some $300 million in annual pension disbursements, The Wall Street Journal says.

About the author

  • Ivy Mungcal

    As former senior staff writer, Ivy Mungcal contributed to several Devex publications. Her focus is on breaking news, and in particular on global aid reform and trends in the United States, Europe, the Caribbean, and the Americas. Before joining Devex in 2009, Ivy produced specialized content for U.S. and U.K.-based business websites.