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INTERVIEW-Brazil's recovery not threatened by rash of poor data -Meirelles
October 6, 2016 / 10:11 PM / a year ago

INTERVIEW-Brazil's recovery not threatened by rash of poor data -Meirelles

(Recast, adds Meirelles comments and context)

By Alonso Soto

BRASILIA, Oct 6 (Reuters) - Brazil’s economy is on track to pull out of its worst recession on record despite a string of negative economic data this week, Finance Minister Henrique Meirelles told Reuters on Thursday.

In a telephone interview from the sidelines of the International Monetary Fund and World Bank fall meetings in Washington, Meirelles said he is sticking by his forecast for an economic rebound of 1.6 percent next year.

Brazil’s centre-right government would press ahead with reforms, presenting a proposal for an overhaul of the bloated welfare system to Congress this month, Meirelles said. He also voiced confidence that a constitutional amendment to curb public spending would be approved this year.

“In a recovery, you usually have ups and downs, but the median is what matters,” said Meirelles, adding that he expects Brazil’s $2 trillion economy to return to growth in the last quarter of this year.

A sharp drop in industrial output in August and a surge in unemployment raised fears this week that the Brazilian economy could take longer to recover from its worst recession in a century.

The approval of fiscal austerity reforms in Congress would support the incipient recovery and shield the South American nation from global downturns, Meirelles said.

However, he dismissed a recommendation by the IMF to set a long-term budget surplus target, saying that a proposed ceiling on public spending is a more credible goal.

Meirelles, a former chief operating officer of BankBoston Corp, said he is confident a wave of protectionism in the United States and Europe will be short-lived.

“I believe this is cyclical and the trend of globalization will continue because it is inevitable,” Meirelles said. (Reporting by Alonso Soto; Editing by Daniel Flynn and James Dalgleish)

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