Rousseff pledges to tackle the “Brazil cost” with new stimulus package
Brazilian President Dilma Rousseff said on Friday her government will unveil more measures to stimulate the economy in the next few months, including investments in ports, airports, railroads and highways.
Speaking to reporters in London, where she is attending the opening of the Olympic Games, Rousseff also said Brazil's economy will grow at a faster rate in coming months, despite the impact of the global economic crisis.
We will move forward with our counter-cyclical program in August and September she said, referring to the raft of stimulus measures Brazil has deployed since the beginning of the year, such as tax breaks to stimulate consumer demand.
The government does not rule out additional tax breaks, but the focus now seems to be on tackling the so-called Brazil cost - the mix of logistical bottlenecks, high taxes and other costs that make Brazil one of the world's most expensive places to do business.
We're very worried about the country's cost, Rousseff said, citing plans to reduce electricity costs by lowering taxes for energy utilities.
Brazil, which will host the World Cup in 2014 and the Olympics two years later, has been struggling to improve and expand its infrastructure as its economy grinds to a near halt.
After strong growth of 7.5% in 2010, the economy grew by just 2.7% in 2011. This year, economists are forecasting growth of as low as 1.5%.
Rousseff said additional stimulus measures will not compromise Brazil's fiscal stability, even as some economists warn the country may miss this year's primary surplus target.
We surely are on a path to stability. We will do all of that while maintaining our fiscal strength, inflation under control and keeping our social policies, she pledged.