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Model that Helped Brazilian Economy to Grow Now Exhausted, Says Rousseff

09/29/2015 - 09h34

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THAIS BILENKY
FROM NEW YORK

MARCELO NINIO
MARINA DIAS
SPECIAL ENVOYS TO NEW YORK

President Rousseff said on Monday (28) that the model that helped the Brazilian economy to grow in recent years has become exhausted, and recognized that internal problems have contributed to the current crisis.

In a speech at the opening of the UN's General Assembly, she defended the measures taken to stimulate the economy since the global financial crisis of 2008, but said that there is no way to maintain them.

"This effort has reached its limit, both for internal fiscal reasons and for reasons related to the external situation," she said.

She reemphasized how Brazil's current difficulties are related to changes in the global situation, such as the fall in prices of raw materials and the slow recovery of the global economy.

"The fall in the exchange rate and recessive pressures produced inflation and a sharp fall in tax revenue, leading to restrictions on public finances," she said.

The President defended the new fiscal program submitted to Congress by the government, which includes R$26 billion (USD $6.3 billion) in spending cuts and tax rises, including the reintroduction of the CPMF, a tax on financial transactions.

Rousseff's popularity has nosedived since the beginning of her second term in January, when she found herself obliged to adopt austerity measures to balance the public finances, distancing herself from her discourse during her re-election campaign in 2014.

The President also said that the progress of recent years has been made "in an environment of consolidation and reinforcement of democracy", and said that Brazil "will continue on the democratic path."

The phrase, which was not included in the version of the speech distributed to journalists beforehand, has been interpreted by her allies as a swipe at those among her political opponents who advocate her impeachment.

Translated by TOM GATEHOUSE

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