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By Brian Winter
BRASILIA, June 3 President Dilma Rousseff said
on Tuesday she cannot fully explain why Brazil's economy is
growing so slowly, attributing problems to markets' "ill humor"
toward the World Cup host nation rather than any urgent need for
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 soccer 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, labor
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
"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
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 favors 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 canceled last
year following an uproar over leaked National Security Agency
documents which showed U.S. spying on both her government and
Rousseff said it was "very important to resume" the
Brazil-U.S. relationship, which she called a "strategic
(Editing by Simon Cameron-Moore)