Sept. 13 (Bloomberg) -- Brazil doesn’t have “much more room” for tax breaks and will likely rely on lower interest rates on loans to stimulate the economy, Finance Minister Guido Mantega told Estado de S. Paulo.

“From the tax point of view, we don’t have much more room,” Estado cited Mantega as saying in an interview. The government will likely adopt “financial measures, such as offering cheaper credit. We haven’t emptied the arsenal.”

Mantega said he is “satisfied” with the current tax cuts and their programmed expiration dates, Estado reported. The government will likely have to reduce some costs to increase its primary surplus in 2010, Mantega told Estado.

Central bank President Henrique Meirelles said the economy shows signs of overcoming the crisis and that government stimulus measures are being reduced as demand for them wanes, Estado said. Brazil has the capacity to grow this year and next “without unbalancing the economy,” Meirelles told Estado.

To contact the reporter on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net.

Last Updated: September 13, 2009 11:21 EDT