RIO DE JANEIRO, Sept 10 (Reuters) - In the wake of losing its investment grade credit rating, President Dilma Rousseff said Brazil was on a sure economic path back to growth and was able to pay its bills, according to an interview published on Thursday in the Brazilian business daily Valor Economico.
Ratings agency Standard & Poor's downgraded Brazil's credit rating to junk grade late on Wednesday, citing the mounting political problems that are driving a government deficit in Latin America's largest economy.
The downgrade heaps further pressure on Rousseff, who is battling calls for her impeachment amid single-digit approval ratings. Brazil has slipped into its deepest recession in a quarter of a century and the government struggles to limit spending despite commodities prices falling and a recent domestic consumption boom screeching to a halt.
In the interview, Rousseff said Brazil "is paying all its contracts and we have a clear economic strategy... We will return this country to growth."
The country will achieve a primary budget surplus next year, Rousseff said, despite having sent Congress a budget bill that forecasts a primary deficit in 2016.
In the next few weeks, she plans to send Congress measures to increase taxes and to reduce obligatory government spending. Together the moves aim to adjust next year's budget by 64 billion reais ($16.5 billion), turning a 0.5 percent deficit into a 0.7 percent surplus.
S&P had said the budget fiasco, and the tensions within government it demonstrated, had been a key reason for the downgrade to the highest junk rating of BB-plus, from BBB-minus.
But Rousseff said the government was putting practicality first.
"I'm in a Confucian phase," Rousseff told Valor when asked about the infighting between her orthodox finance minister, Joaquim Levy, and Planning Minister Nelson Barbosa, who is regarded as more heterodox. "I am in favor of the middle way and of harmony."
Rousseff said Levy had her confidence and would not be leaving the government.
About calls for her own resignation, Rousseff was equally direct.
"I'm not leaving here, I will not hand in my resignation. I don't owe anything, I didn't do anything wrong."
($1 = 3.88 Brazilian reais)
Reporting by Stephen Eisenhammer Editing by W Simoln