Brazilian President Dilma Rousseff said on Tuesday she cannot fully explain why Brazil’s economy is growing so slowly, attributing problems to markets’ “ill humor” toward the World Cup host nation, rather than any urgent need for reforms.
In a rare, nearly three-hour-long interview with international reporters, Rousseff sounded broadly satisfied with her left-leaning government’s course ahead of a bid for re-election in October, though Brazil has fallen under a harsh spotlight ahead of the soccer tournament starting on Thursday next week.
Brazil’s economy has averaged only 2 percent growth since the former Marxist guerrilla took office in 2011, about half the pace that made it a Wall Street darling in the previous decade.
Many investors and business leaders say sweeping tax, labor and other reforms are needed to unlock a new era of growth.
However, Rousseff, speaking over cocktails and dinner at her presidential palace, said domestic conditions are already ripe for healthy growth and seemed to downplay the need for major economic changes if she is re-elected to a second term.
“You can’t explain why” Brazil is not growing faster, she said. “All conditions point to Brazil not only growing, but growing well.”
“There seems to be an ill mood toward Brazil today,” she said. “I don’t know why.”
Asked about the possibility of reforms in a second term, Rousseff said that she had cut many taxes while in office, but that an elusive full consensus was necessary in Congress to do a broader overhaul of the tax code.
Rousseff holds a healthy lead in polls over her two more centrist main rivals, thanks largely to support from Brazil’s poor. She said her main “source of pride” was continued declines in poverty and inequality, which she said contrasted sharply with trends in Western Europe and the US.
She acknowledged public frustration with delays in some building projects associated with the World Cup, such as train lines. That anger contributed to street protests that have occasionally flared over the past year and are expected to occur again during the tournament.
“Nobody does a [subway] in two years. Well, maybe China,” she said with a smile, calling delays “the cost of our democracy.”
Asked about inflation, Rousseff said that it was slowing down, as it usually does in the middle of the year. She ruled out any changes to the inflation target of 4.5 percent with a tolerance band in each direction of 2 percentage points. At least one of her election opponents favors a lower goal.
Rousseff said the central bank is engaged in a “variation of tapering” as it prepares to rein in its foreign exchange intervention program of currency swaps. However, she added that the currency has had six months of “total stability.”
The Brazilian real weakened slightly on Tuesday after sliding 2.5 percent over the past few days against the US dollar.
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