Investment rebound expected to end Brazilian recession, boost Temer

miércoles 31 de agosto de 2016 13:54 GYT

By Silvio Cascione and Brad Haynes

BRASILIA/SAO PAULO Aug 31 (Reuters) - A rebound in spending on machinery and equipment by Brazilian companies should lead Latin America's largest economy out of a deep recession in the coming months, providing a much-needed boost for new center-right President Michel Temer.

A recent survey of chief financial officers by the local American Chamber of Commerce showed nearly half of the companies had put investment and strategic decisions on hold during the impeachment of leftist President Dilma Rousseff.

The Senate's dismissal of Rousseff on Wednesday on charges of breaking budget rules could unleash a wave of new investments under her successor Temer, her former vice president who has served as interim president since she was suspended in mid-May.

Temer has pushed a pro-business agenda, courting investors with plans to stabilize government debt, sell public assets and offer a more predictable business environment, in a bid to pull Brazil out of what is likely to be its worst recession.

The prospect that Temer could serve the remainder of Rousseff's presidential term through 2018 has helped in recent months to spur new investments, including by French auto maker Renault and Chinese solar cell maker BYD Energy.

Economic data published on Wednesday showed that total investment in the second quarter grew for the first time since mid-2013.

Further evidence of a recovery would strengthen Temer's hand in Congress as he tries to pass unpopular budget and pension reforms, the results of which will be far more important for investors than any brief post-impeachment honeymoon.

For the first time in years, economists have been raising rather than cutting their growth forecasts.   Continuación...