Brazilian President Dilma Rousseff vowed to undertake an “immense effort” to slow inflation as she re-tools her economic team following re-election last month.
“The most recent data shows inflation will finish the year within the target,” Rousseff told leaders of her Workers Party in the northeastern city of Fortaleza. “This doesn’t mean we’re content with inflation at the upper limit of the target range, on the contrary, we’re going to do an immense effort to reduce inflation.”
Consumer prices in Brazil rose 6.59 percent in October, above the 6.50 percent upper limit of the central bank’s target. Policy makers last month raised the benchmark Selic rate 25 basis points to 11.25 percent, the first increase since April. Central Bank President Alexandre Tombini said yesterday that he wants inflation to slow to 4.5 percent by 2016.
Rousseff spoke one day after naming Banco Bradesco SA executive Joaquim Levy to be her next finance minister, replacing Guido Mantega. She said Latin America’s biggest economy needs to improve competitiveness and innovate to help confront a global economic slowdown.
Levy said the government would pursue a primary budget surplus target, which excludes interest payments, of 1.2 percent of gross domestic product in 2015 and of at least 2 percent in 2016 and 2017. He also said the government would make public accounts more transparent, work to increase the economy’s productivity and aim to reduce gross public debt as a percentage of GDP.
Slower growth and a widening budget deficit prompted Moody’s Investors Service in September to cut Brazil’s credit outlook to negative. Moody’s rates Brazil Baa2, two levels above junk. Six months earlier Standard & Poor’s reduced Brazil’s rating to the lowest level of investment grade.
“We will take the necessary measures, without shocks, in a way that’s gradual, systematic and efficient, as has been done since the beginning of 2003 when we took charge of the country,” Rousseff said.
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