Brazil rules out stimulus, focused on fiscal challenges-source

viernes 7 de noviembre de 2014 14:29 GYT
 

By Alonso Soto and Luciana Otoni

BRASILIA Nov 7 (Reuters) - The Brazilian government is not considering new measures to help struggling industries and is instead focused on shoring up its finances to recover the trust of investors next year, a senior government official told Reuters on Friday.

Newly re-elected President Dilma Rousseff has vowed more fiscal rigor and less tolerance with inflation to rebuild ties with investors damaged by bouts of intervention and selective stimulus to some sectors of the economy.

"This is not the time to be thinking about stimulus measures, we have other priorities," said the official, who is directly involved in economic policy decisions.

"The best thing to do at this moment is to send signals that we will consolidate fiscally in the first year of the next government."

Rousseff's promises to name a new economic team and change policies with the help of business leaders raised expectations for more stimulus to help struggling manufacturers.

The official, who requested anonymity to speak freely, said the government will focus on cutting expenditures to improve the country's primary budget balance, which risks ending the year in deficit for the first time in decades.

The Rousseff administration is also considering extending the maturity of debts that the state development bank BNDES has with the Treasury to reduce the amount of fresh capital the bank needs. The idea, the source said, is for the Treasury to "make the smallest injection possible" this year.

BNDES and the government are in talks about terms of a potential capital injection of up to 30 billion reais ($11.67 billion) for the lender.   Continuación...