Rousseff: 'Can't explain' why Brazil economy so slow

By Brian Winter

BRASILIA Wed Jun 4, 2014 12:40am EDT REUTERS

Brazilian President Dilma Rousseff gestures as she attends the inauguration of Terminal 3 at Guarulhos International airport in Sao Paulo May 20, 2014. 

Credit: Reuters/Paulo Whitaker

(Reuters) - President Dilma Rousseff said on Tuesday she cannot fully explain why Brazil's economy is growing so slowly, attributing problems to markets' "ill humor" toward the World Cup host nation rather than any urgent need for reforms.

In a rare, nearly three-hour-long interview with international reporters, Rousseff sounded broadly satisfied with her left-leaning government's course ahead of a bid for re-election in October, though Brazil has fallen under a harsh spotlight ahead of the soccer tournament starting on June 12.

Brazil's economy has averaged only 2 percent growth since the former Marxist guerrilla took office in 2011, about half the pace that made it a Wall Street darling last decade.

Many investors and business leaders say sweeping tax, labor and other reforms are needed to unlock a new era of growth.

But Rousseff, speaking over cocktails and dinner at her presidential palace, said domestic conditions are already ripe for healthy growth and seemed to downplay the need for major economic changes if she is reelected to a second term.

"You can't explain why" Brazil isn't growing faster, she said. "All conditions point to Brazil not only growing, but growing well."

"There seems to be an ill mood toward Brazil today," she said. "I don't know why."
Asked about the possibility of reforms in a second term, Rousseff noted that she had cut many taxes while in office but that an elusive full consensus was necessary in Congress to do a broader overhaul of the tax code.

Rousseff holds a healthy lead in polls over her two more centrist main rivals, thanks largely to support from Brazil's poor. She said her main "source of pride" was continued declines in poverty and inequality, which she said contrasted sharply with trends in Western Europe and the United States.

A policy wonk who never held elected office prior to the presidency, Rousseff spent much of the evening enthusiastically citing details on new infrastructure projects, talking for 10 minutes at one point about water storage tanks as an aide nervously waited to let her know dinner was ready.

She acknowledged public frustration with delays in some building projects associated with the World Cup, such as train lines. That anger contributed to street protests that have occasionally flared over the past year, and are expected to occur again during the tournament.

"Nobody does a (subway) in two years. Well, maybe China," she said with a smile, calling delays "the cost of our democracy."

Asked about inflation, Rousseff emphasized that it was slowing down, as it usually does in the middle of the year. She ruled out any changes to the inflation target of 4.5 percent with a tolerance band in each direction of 2 percentage points. At least one of her election opponents favors a lower goal.

Rousseff said the central bank is engaged in a "variation of tapering" as it prepares to rein in its foreign exchange intervention program of currency swaps. She added, however, that the currency has had six months of "total stability."

The real BRL= weakened slightly on Tuesday after sliding 2.5 percent over the past few days against the dollar to its weakest point in two months.

On foreign policy, Rousseff said she was interested in rescheduling a state visit to Washington that she canceled last year following an uproar over leaked National Security Agency documents which showed U.S. spying on both her government and other Brazilians.

Rousseff said it was "very important to resume" the Brazil-U.S. relationship, which she called a "strategic partnership."

(Editing by Simon Cameron-Moore)

Rousseff ´não consegue explicar`porque o Brasil está crescendo tão devagar (Reuters)

A presidenta Dilma Rousseff disse nesta terça-feira que não podia explicar por que o Brasil não estava crescendo mais rápido, depois que a economia perdeu fôlego e avançou pouco no primeiro trimestre, destaca reportagem de Brian Winter, da Reuters. Dilma disse que não tem a intenção de mudar a meta de inflação, de 4,5%, com margem de dois pontos, mesmo que a inflação tenha se mantido persistentemente elevada ao longo dos últimos anos, entre 5,5% e 6,5%. O texto menciona que, na opinião de investidores e analistas, são necessárias reformas nas leis de trabalho, na carga tributária e outros setores para recuperar o crescimento. Mas ela diz que melhores condições para o crescimento já estão sendo estabelecidas e mudanças drásticas não devem ser necessárias em caso de um segundo mandato. ´Não dá para explicar porque o Brasil não está crescendo mais rápido. Todas as condições existem para um bom crescimento`, disse Rousseff. ´Parece que há um clima ruim em relação ao Brasil atualmente e eu não sei por quê`, completou. No coquetel com jornalistas estrangeiros, a presidenta passou boa parte do tempo falando entusiasticamente sobre novos projetos de infraestrutura e sobre o orgulho que tem dos programas de redução de pobreza, cita o texto. Ela reconheceu uma frustração com atrasos em algumas obras, especialmente as ligadas à Copa do Mundo. ´Ninguém faz um metrô em dois anos...bom, talvez a China, disse, sorrindo. É o custo de uma democracia`, afirmou a presidenta. Na área diplomática, ela mencionou que é ´muito importante` retomar a relação com os Estados Unidos, finaliza o texto. A agência Bloomberg estampa em título que, segundo Rousseff, não há mais espaço no orçamento para novas renúncias fiscais.