Rousseff’s Pledges May Lift Brazil Rates Next Year

Dilma Rousseff’s pledge to rebuild Brazil’s roads, ports, railways and power grid means Latin America’s biggest economy may be stuck for years with some of the world’s highest interest rates, and taxes that might hinder growth.

The 62-year-old former Marxist guerrilla, who leads other presidential candidates in polls ahead of this weekend’s vote, carried the banner of big government as cabinet chief in President Luiz Inacio Lula da Silva’s administration. A failure to curb the growth in public spending and credit she has championed may stifle private investment by keeping the country’s real interest rate around 6 percent, the highest in the Group of 20 nations, according to Arminio Fraga, chairman of the Sao Paulo-based BM&F Bovespa stock exchange.