Brazil’s economic recovery tests Temer
November 10, 2016, 5:34 pm

Will Temer spearhead a revitalization of Brazil’s economy in 2017? [Xinhua]

During his speech to the powerful National Confederation of Industry (CNI) lobby, Temer acknowledged that cutting the budget deficit and reversing the course on recession will take time. He also said that he wanted to boost Brazil’s financial rating and combat rampant unemployment.

Finance Minister Henrique Meirelles, who also addressed the CNI conference on infrastructure building and financing, said the amnesty program for undeclared offshore assets collected $14.67 billion in taxes and fines for the government.

Meirelles also said the pace of economic recovery would depend on business confidence – as the government continues to work on improving the business climate that would allow the private sector to rebound.

In early November, Meirelles told local media that the economy is ripe for reforms, which could include a proposed cap on government spending, in order to restore long-term growth.

Economists had widely expected Latin America’s largest economy to start growing again in the first quarter of 2017.

The IMF, for example, had earlier said that confidence in the Brazilian economy is slowly reawakening. It said that Brazil’s contraction (3.8 per cent) in 2015 would moderately subside to (3.3 per cent) in 2016. It forecast positive growth for Brazil in 2017 but voiced concern over ongoing corruption and political scandals which have rocked Brazil.

Car markers in Brazil clung to that hope, announcing on Wednesday the launch of multiyear investment plans in new models in a bid to rev up sales.

However, the Sao Paulo Auto Show, which opened that day, saw a distinct decline in the number of exhibitors and new models.

Once the world’s fourth largest auto market at a record 3.8 million vehicles in 2012, the Brazilian market has since practically halved in size further adding to Temer’s to-do list.

The BRICS Post with inputs from Agencies