• President spoke with Brazilian newspapers, TVs, radios
  • Government working on tax, social security reform, she said

Brazilian President Dilma Rousseff said her government will work on structural reforms, particularly changes to the tax code, social security and industry regulations, to help reverse the country’s budget deficit and slow above-target inflation.

Budget cuts worth almost 104 billion reais ($25.7 billion) in 2015 were not enough to make up for lost tax revenue during what is forecast to be Brazil’s worst recession in decades, Rousseff told reporters from Brazilian newspapers, TV and radio on Thursday. It was her first formal press conference of the year and was restricted to local media.

Asked about possible subsidies for construction companies and car makers, Rousseff pledged the government will do everything it can “to guarantee growth in some sectors” of the economy. State development bank BNDES needs to provide financial support to smaller, “fragile companies,” she said.

Rousseff’s approval ratings fell to record lows in 2015, the first year of her second term, as a political crisis and a massive corruption investigation exacerbated economic losses from falling commodity prices. Analysts forecast Brazil will end 2016 with inflation approaching 7 percent and an economic contraction of about 3 percent.

Rousseff reaffirmed her commitment to economic stability and the government’s fiscal goal, which includes reaching a primary budget surplus of 0.5 percent of GDP this year. The primary budget excludes payments on interest.

“Our objective is to return as much as possible to the center of the inflation target,” the president said. “Reestablishing fiscal balance is fundamental to reduce inflation.”

Rousseff declined to comment on Brazil’s benchmark interest rate, saying the central bank president is the only person in the government who should talk about monetary policy.

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