(Reuters) – President Dilma Rousseff said on Tuesday she cannot fully explain why Brazil‘s economy is growing so slowly, attributing problems to markets’ “ill humour” toward the World Cup host nation rather than any urgent need for reforms.
In a rare, nearly three-hour-long interview with international reporters, Rousseff sounded broadly satisfied with her left-leaning government’s course ahead of a bid for re-election in October, though Brazil has fallen under a harsh spotlight ahead of the football tournament starting on June 12.
Brazil’s economy has averaged only 2 percent growth since the former Marxist guerrilla took office in 2011, about half the pace that made it a Wall Street darling last decade.
Many investors and business leaders say sweeping tax, labour and other reforms are needed to unlock a new era of growth.
But Rousseff, speaking over cocktails and dinner at her presidential palace, said domestic conditions are already ripe for healthy growth and seemed to downplay the need for major economic changes if she is reelected to a second term.
“You can’t explain why” Brazil isn’t growing faster, she said. “All conditions point to Brazil not only growing, but growing well.”
“There seems to be an ill mood toward Brazil today,” she said. “I don’t know why.”
Asked about the possibility of reforms in a second term, Rousseff noted that she had cut many taxes while in office but that an elusive full consensus was necessary in Congress to do a broader overhaul of the tax code.
Rousseff holds a healthy lead in polls over her two more centrist main rivals, thanks largely to support from Brazil’s poor. She said her main “source of pride” was continued declines in poverty and inequality, which she said contrasted sharply with trends in Western Europe and the United States.
A policy wonk who never held elected office prior to the presidency, Rousseff spent much of the evening enthusiastically citing details on new infrastructure projects, talking for 10 minutes at one point about water storage tanks as an aide nervously waited to let her know dinner was ready.
She acknowledged public frustration with delays in some building projects associated with the World Cup, such as train lines. That anger contributed to street protests that have occasionally flared over the past year, and are expected to occur again during the tournament.
“Nobody does a (subway) in two years. Well, maybe China,” she said with a smile, calling delays “the cost of our democracy.”
Asked about inflation, Rousseff emphasized that it was slowing down, as it usually does in the middle of the year. She ruled out any changes to the inflation target of 4.5 percent with a tolerance band in each direction of 2 percentage points. At least one of her election opponents favours a lower goal.
Rousseff said the central bank is engaged in a “variation of tapering” as it prepares to rein in its foreign exchange intervention program of currency swaps. She added, however, that the currency has had six months of “total stability.”
The real weakened slightly on Tuesday after sliding 2.5 percent over the past few days against the dollar to its weakest point in two months.
On foreign policy, Rousseff said she was interested in rescheduling a state visit to Washington that she cancelled last year following an uproar over leaked National Security Agency documents which showed U.S. spying on both her government and other Brazilians.
Rousseff said it was “very important to resume” the Brazil-U.S. relationship, which she called a “strategic partnership.”