May 17, 2019 / 7:55 PM / 3 months ago

UPDATE 1-Brazil lower house to vote on pension reform by early July -speaker

(Adds lawmaker comments, context)

By Pedro Fonseca

RIO DE JANEIRO, May 17 (Reuters) - Brazil’s lower house will vote on the government’s pension reform bill no later than the start of July, lower house speaker Rodrigo Maia said on Friday.

Speaking in Rio de Janeiro alongside Economy Minister Paulo Guedes, Maia said he was certain the chamber and the Senate would approve pension reform, the government’s cornerstone policy to save 1.237 trillion reais ($302 billion) over the next decade, fix the public finances, and revive the economy.

The lower house vote will take place by the start of July “at the latest,” Maia said, while Guedes said approval in the next two to three months would improve the growth outlook for the second half of the year.

Guedes said growth expectations are falling as uncertainties surrounding the political divisions in Brasilia hold up social security reform, but he insisted that growth was still broadly on the right track.

“What I’m interested in is the overall direction, which is still pointing the right way,” he said.

There has been a barrage of downward revisions to growth forecasts recently. Guedes said this week the government would lower its 2019 growth outlook to 1.5% from 2.2%, and the central bank said the economy probably contracted in the first quarter.

The deteriorating domestic political and economic picture has hit Brazilian markets. The real hit an eight-month low on Friday at 4.11 per dollar, the Bovespa stock market fell 5% this week and many interest rate futures contracts had their biggest one-day rise on Friday since March.

$1 = 4.10 Reporting by Pedro Fonseca Writing by Jamie McGeever Editing by Jonathan Oatis and Richard Chang

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