Brazil's Rousseff rules out more spending cuts -newspaper

Sun Jul 28, 2013 9:48am EDT

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* Rousseff rules out exit of Finance Minister Mantega

* Says all measures to cut spending have been taken

SAO PAULO, July 28 (Reuters) - Brazilian President Dilma Rousseff ruled out additional spending cuts or a reduction in the number of government ministries from 39, saying the benefits of such measures to spur economic growth would be minimal, Folha de São Paulo newspaper reported on Sunday.

Rousseff said in an interview with Folha that all possible measures to contain budget expenditures have been taken and that trimming the number of ministries might hamper the government's efforts to reduce social and economic inequality.

Rousseff reiterated that Finance Minister Guido Mantega "will stay where he's always been: at the finance ministry."

Critics of Mantega have called for him to quit, saying his efforts to kick-start economic growth have failed and have eroded credibility in the soundness of the government's policy framework.

Brazil, Latin America's largest country, has been rocked by a wave of massive protests, by mostly young people angered by government corruption, the misuse of public money, the high cost of living and a lack of jobs.

Rousseff defended her policies, saying inflation remains under control, the labor force is still adding workers, debt measures are around record-lows and investment in key areas is growing slowly. "We are still growing, despite grappling with a storm in our faces," she told the newspaper.

Rousseff is struggling in opinion polls and there are mounting calls for the return of her popular predecessor, Luiz Inácio Lula da Silva, her political mentor.

Asked whether Lula might run for president again, she said: "I don't know if Lula would come back because he never went off, he never left" the government.

Lula, whose two-term presidency lasted between 2003 and 2010, has repeatedly denied he has any intention of running for the presidency again.

"Everything that rises, comes down, and everything that comes down, rises," Rousseff told Folha when asked about the decline in her popularity. In recent weeks, three key pollsters have shown her approval ratings as well as that of her government plunging an average 30 percentage points from almost record highs.

Rousseff declined to comment on a potential cabinet re-shuffle. Calls to the presidential palace's press office to confirm the content of the Folha interview were not immediately returned.

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