Brazil’s Te­mer be­gins stim­u­lus Mea­sures to halt dis­con­tent

Kuwait Times - - BUSINESS -

BRASILIA:

Brazil­ian Pres­i­dent Michel Te­mer on Thurs­day un­veiled a slew of stim­u­lus mea­sures to re­duce the debt bur­den of busi­nesses and con­sumers strug­gling with the coun­try’s worst re­ces­sion on record amid grow­ing pop­u­lar dis­con­tent. Although lim­ited in scope, the mea­sures aim to ap­pease Brazil­ians an­gry at the deep­en­ing re­ces­sion in Latin Amer­ica’s big­gest econ­omy and al­le­ga­tions of cor­rup­tion against Te­mer and some of his clos­est al­lies.

“We are tak­ing mea­sures to pull the econ­omy out of the re­ces­sion,” Te­mer said in a brief­ing flanked by the head of the Se­nate and the Lower House. “Even dur­ing these tur­bu­lent times the gov­ern­ment doesn’t stop.” The gov­ern­ment will write off some of the taxes owed by com­pa­nies re­port­ing losses and al­low oth­ers to pay their debts in in­stall­ments to ex­pand their liq­uid­ity and im­prove their ac­cess to new credit.

Other mi­croe­co­nomic mea­sures in­cludes forc­ing banks and credit card com­pa­nies to ei­ther re­duce the time they take to process pay­ments or lower the fees they charge busi­nesses. The gov­ern­ment will also stim­u­late long-term credit for real es­tate. With the coun­try’s fi­nances in tat­ters, Te­mer has ruled out di­rect fis­cal stim­u­lus in his bid to ease the debt bur­den of Brazil­ians as the re­ces­sion, now fin­ish­ing its sec­ond year, forces droves of com­pa­nies into bank­ruptcy and elim­i­nates mil­lions of jobs.

Fi­nance Min­is­ter Hen­rique Meirelles said the gov­ern­ment’s new mea­sures to raise pro­duc­tiv­ity will go in tan­dem with gov­ern­ment ef­forts to re­bal­ance the de­pleted pub­lic ac­counts. The plan aims to lower the cost of do­ing busi­ness in Brazil, stream­lin­ing some taxes and cut­ting red tape to re­duce the time it takes to open a new busi­ness or ex­port and im­port goods. Since Te­mer for­mally took of­fice in Au­gust, he has faced pres­sure from busi­ness groups and po­lit­i­cal al­lies to swap aus­ter­ity mea­sures for poli­cies aimed at jump-start­ing growth. Eco­nomic ac­tiv­ity fell 0.48 per­cent in Oc­to­ber, the eighth drop in 10 months, of­fi­cial data showed ear­lier on Thurs­day, dash­ing hopes of an im­mi­nent re­cov­ery de­spite a jump in con­fi­dence af­ter the im­peach­ment of Te­mer’s left­ist pre­de­ces­sor Dilma Rouss­eff.

The slug­gish re­cov­ery and cor­rup­tion al­le­ga­tions threaten to de­rail Te­mer’s aus­ter­ity plan aimed at plug­ging a widen­ing bud­get deficit that last year cost the once-boom­ing Brazil its in­vest­ment grade credit rat­ing. — Reuters

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