Brazil President Temer forecasts growth late in 2017

To do that, the “perverse cycle” that led to public spending attaining

Published in 08/11/2016 - 17:24 By Pedro Peduzzi and Daniel Lima report from Agência Brasil - Brasília

Brasília - O presidente Michel Temer abre o seminário Infraestrutura e Desenvolvimento do Brasil, no auditório da Confederação Nacional da Indústria (CNI) (José Cruz/Agência Brasil)

In noting that his government has been eliminating “perverse cycle” facing the country, President Michel Temer unveiled today (Nov. 8) a set of optimistic moves he says stem from austerity measures recently implemented.José Cruz/Agência Brasil

In noting that his government has been eliminating “perverse cycle” facing the country, President Michel Temer unveiled today (Nov. 8) a set of optimistic moves he says stem from austerity measures recently implemented. Among the actions is the constitutional amendment bill on public spending.

“Overcoming this severe crisis requires extraordinary work that allows us to move forward. This is a perverse cycle we're breaking up. Faced with this fact we have found that the spending standards consolidated over recent years have become unsustainable. We must therefore begin by cutting the meat—public spending,” he declared.

Temer mentioned that Brazil may resume employment generation and reporting a “non-negative” gross domestic product as of the second half of 2017. He went on to say that, in case the trends verified persist, he expects the country to recover the investment grade status it had earned from credit rating agencies.

“Now the [grade from rating agencies] went down from 531 points to 318 points. We restore our investment grade when we reach 240. We can do it in a few months,” Temer argued.

The president opened the seminar titled Infrastructure and Develpment in Brazil this morning, at the National Industry Confederation (CNI). The event is promoted by newspaper Valor Econômico, in a partnership with CNI.

"They want the government to come to power and have the sky blue two months later. It's not like that. It takes time. Restoring employment is something that takes time. It is gradual and slow, but our hope is for the GDP not to be negative by the second half of 2017. It can be demanded from us if it's not the case." said the president said during the seminar.

Projections from financial institutions for the fall in the economy this year increased from 3.30% to 3.31%. For 2017, expected growth was lowered from 1.21% to 1.20%

"Sometimes I feel a certain prejudice in the air. They want to combat unemployment but do not want to encourage the private enterprise. Our hope is that the pace we have set should allow employment to be resumed in the second half of next year," he added.

Temer noted that, in order for this scenario to materialize, the government must adjust its accounts and draw investment from the private enterprise to strategic areas, like infrastructure. The country, he says, had been challenged by “an increasing public debt and alarming unemployment.”

The president quoted from a speech by former UK Prime Minister Margaret Thatcher as a way to justify austerity measures adopted by the Brazilian government. “I saw a Thatcher address where she says: 'look, note that there is no such thing as public money. Money always comes from the private sector. You're the one paying. You can either control it, or else generosity disappears.' The State is like a company. You can't spend more than you earn. This is the proposal brought forth by this most simple constitutional amendment on public spending,” the president said.


Translated by Fabrício Ferreira / Amarílis Anchieta


Fonte: Brazil President Temer forecasts growth late in 2017

Edition: Maria Claudia / Nira Foster

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