4 de diciembre de 2014 / 18:59 / en 3 años

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

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 erratic and interventionist economic policies.

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

However, Brazil’s future credit rating decisions will depend on the execution and consistency of the fiscal adjustment at a time when growth slows, 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. (Reporting by Alonso Soto; Editing by Bernadette Baum)

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