UPDATE 1-S&P says Levy appointment signals positive policy shift in Brazil

jueves 4 de diciembre de 2014 17:31 GYT

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By Alonso Soto

BRASILIA Dec 4 (Reuters) - The appointment of fiscal conservative Joaquim Levy as Brazil's finance minister sent a stronger-than-expected message of positive policy changes during President Dilma Rousseff's second term, Standard & Poor's senior analyst Lisa Schineller told Reuters on Thursday.

Following her narrow re-election victory in October, Rousseff vowed to streamline government spending to regain investor confidence after years of intervention in the economy.

Levy, her pick to head the economic team, has called for more fiscal discipline and credible debt-reduction goals, which Schineller termed positive steps to reverse the deterioration of the once-booming Brazilian economy.

However, S&P's future credit rating decisions on Brazil will depend on the execution and consistency of the fiscal adjustment, Schineller warned.

"The signaling of policy (change) with this economic team would be somewhat stronger than we had expected," said Schineller, who is S&P's lead analyst for Brazil.

"The signaling from the new minister to be is that of changes in policy, but again execution from our point of view is going to be a very important component given the challenging economic environment," she added.

Sluggish economic growth and rising government spending had prompted S&P to cut Brazil's debt rating closer to "junk" territory in March.   Continuación...