Santander Critique of Brazil Economy Unacceptable, Rousseff Says

President Dilma Rousseff said it was unacceptable for Banco Santander Brasil SA to write that Brazil’s economy would deteriorate if her chances of being re-elected stabilized or improved.

“It’s unacceptable for any country, especially the seventh economy in the world, to accept any level of institutional interference from any member of the financial system in electoral and political activity,” Rousseff told journalists today. “This is lamentable. This is unacceptable for any candidate, be it me or someone else.”

Santander apologized for the note in a July 25 posting on its website. It said the note didn’t reflect its position and violated a directive that economic analysis sent to clients not contain political bias. Its press office referred Bloomberg News to the statement when asked by e-mail about its response to Rousseff’s comments.

Public opinion polls show Rousseff’s lead ahead of voting in October is narrowing as inflation accelerates and growth slows. Equity markets rallied after a Datafolha poll earlier this month showed Rousseff doesn’t have a lock on re-election. Some investors speculate the economy may improve under a different president.

Speaking in the interview that aired on the radio, Rousseff said she would talk to the bank’s chief executive officer. Rousseff said she wouldn’t provide details on possible future actions when asked whether she would sue Santander.

Second Round

Rousseff would win 44 percent of the vote in a possible second round against candidate Aecio Neves, who would get 40 percent, according to the July 15-16 Datafolha poll published after markets closed on July 17. The gap of four percentage points falls within the margin of error of plus or minus two percentage points.

The Ibovespa Sao Paulo Stock Exchange rose 2.5 percent the day after the poll came out, reversing two days of losses with the biggest increase in six weeks.

Gross domestic product will expand 0.9 percent this year, compared with the previous week’s forecast of 0.97 percent, according to the July 25 central bank survey of about 100 analysts published today. It was the ninth consecutive week that they lowered their growth outlook. GDP expanded 2.5 percent last year.

Analysts in the same survey said consumer prices will end 2014 at 6.41 percent, which would be the fastest year-end rate since 2011 when Rousseff entered office. Policy makers target inflation of 4.5 percent, plus or minus two percentage points.

To contact the reporters on this story: Anna Edgerton in Brasilia at aedgerton@bloomberg.net; Arnaldo Galvao in Brasilia Newsroom at agalvao1@bloomberg.net

To contact the editors responsible for this story: Andre Soliani at asoliani@bloomberg.net Randall Woods

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