Brazil to deal with new international reality: Finance Minister
October 11, 2015, 4:48 am

Levy called on cash-rich pension funds and institutions to invest in infrastructure projects [Xinhua]

“I have no plans of leaving the government. We still have a long agenda to fulfill that includes structural reforms and preparing the country to deal with a new international reality,” Levy said.

Despite $7 trillion in quantitative easing from banks in industrial nations since the global financial crisis, the world is stuck in a “new mediocre” growth pattern, IMF chief Christine Lagarde said on Thursday.

In a separate event on the sidelines of the annual meetings of the World Bank Group and the International Monetary Fund on Saturday in the Peruvian capital Lima, Levy said Brazilian politicians will reach a consensus soon, paving the way for Congress to adopt fiscal adjustment measures that would aid the beleaguered Brazilian economy.

Congress has delayed voting on whether to overturn President Dilma Rousseff’s veto on spending bills.

“I think that ultimately the political problem we see now will be solved; there’s not many options outside of that. People will not allow us to get on the road that would imply more inflation or disorganization,” said Levy.

Brazil’s economy is forecast by the IMF to contract 3 per cent this year.

The government is “reducing expenditures, because people are not that tolerant of taxes, but then you have to do whatever it takes to get to a 0.7” per cent primary budget surplus, Levy said, referring to the government’s 2016 target. “We have to do that as soon as possible, because the longer it takes, the higher the toll for the economy.”

Earlier on Thursday, Levy called on cash-rich pension funds and institutions to invest in infrastructure projects.

“There are plenty of savings in the world,” he told the IMF meeting.

TBP and Agencies