Brazil must push ahead with reforms, including a proposed cap on government spending and an overhaul of social security rules, to restore long-term order to public finances in Latin America's biggest economy, according to the country's finance minister.
Finance Minister Henrique Meirelles, in an interview published by the Folha de S. Paulo newspaper on Sunday, said he was confident that Brazil's Senate would soon follow the lower house of Congress in approving the proposed ceiling.
The measure, meant to rebalance public finances after years of heavy spending that led to a government deficit equal to about 10% of GDP, is the first of several that President Michel Temer hopes will promote investment and help restore confidence and return Brazil to growth after two years of recession.
Meirelles, who assumed the Finance Ministry earlier this year when Temer took over for impeached former President Dilma Rousseff, told Folha that additional measures, especially a reform of Brazil's costly social security program, will be necessary to help the spending cap make any difference.
Without changes to existing retirement laws, he said, Brazil would have to increase already onerous tax levels to keep financing social security payments. It would mean a tax increase because the bill would have to paid, Meirelles said.
The minister, who previously served as central bank president during the administration of former President Lula da Silva, declined to say whether he would be a candidate in 2018 presidential elections.
I am a candidate to do a good job at the Finance Ministry and to make the economy grow, he said.
Meirelles, echoing sentiments already expressed by many economists, said he expects Brazil to finally resume growth next year but that the severity of continuing economic problems means that any rebound will be slow.
There is no doubt that the resumption of growth will be a slower process than in previous crises, he told Folha.