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UPDATE 1-Brazil's Temer says economy turning around, confidence rising
March 17, 2017 / 6:29 PM / 8 months ago

UPDATE 1-Brazil's Temer says economy turning around, confidence rising

(Adds Temer comments on successes, political context)

By Anthony Boadle

BRASILIA, March 17 (Reuters) - The Brazilian economy has begun to turn around, jobs are being created, and business confidence is slowly recovering, President Michel Temer said on Friday, touting initial successes of his recovery plan.

Speaking at a business meeting in Sao Paulo, Temer pointed to the latest cover of The Economist showing Brazil beginning to lift off among seven countries on the rise, and also Moody’s decision on Wednesday to raise the rating outlook for Brazilian sovereign debt to stable from negative.

“This shows confidence is retuning bit by bit,” he said.

Temer touted the “absolute success” of Thursday’s auction of rights to operate four airports, which drew nearly double the minimum bids in a gauge of investors’ appetite for a new wave of privatizations his administration has launched.

To highlight a return to growth, Temer himself announced on Thursday that the Brazilian economy had added 35,612 payroll jobs in February, a statistic that is normally published by the Labor Ministry.

“Inflation is slowing and the forecast is it will be below the target by the end of the year,” he said, referring to the central bank’s 4.5 percent target.

Temer added that passage of proposed reforms of the country’s costly social security system and modernization of outdated labor laws remained essential for the success of his plan to bring the budget deficit under control and pull the economy out of a “very violent” recession, its worst on record.

Temer, a business-friendly centrist, acknowledged that his unpopular pension reform bill, which drew protests across Brazil this week, will undergo changes in Congress, but he urged lawmakers to adopt the basic proposal.

With the Car Wash corruption investigation reportedly targeting six of his ministers and top allies in Congress, political uncertainty clouds Temer’s future.

As he highlighted the advances of Brazil’s timid recovery at Friday’s event, the most dynamic sector of the economy and driver of its exports came under investigation.

Police raided dozens of offices of meatpackers, including industry giants JBS SA and BRF SA, to investigate alleged bribery of inspectors to overlook unsanitary practices such as processing of rotten meat. (Reporting by Anthony Boadle; Editing by Paul Simao)

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