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Brazil government bangs pension reform drum as growth outlook fizzles

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Brazil government bangs pension reform drum as growth outlook fizzles

The comments by Labor and Pensions Secretary Rogerio Marinho come amid deepening doubts about the fate of pension reform, which has weighed heavily on business and investor sentiment.

A regular central bank survey of economists on Monday showed that growth forecasts for this year have fallen to a new low.

Markets slumped last week on reform concerns and the central bank said the economy probably contracted in the first quarter.

Bolsonaro, accused of failing to garner support from lawmakers for his pension reform bill, tweeted on Monday that the government will put forward tax reform proposals as soon as pension reform, “the gateway to Brazil’s progress,” is passed.

“Approval paves the way for other economic steps that will benefit the whole country, like tax reform, which we intend to present soon after,” Bolsonaro tweeted.

Bolsonaro will join Economy Minister Paulo Guedes later on Monday to launch the second phase of a publicity campaign “New Social Security: You Can Ask” promoting the administration’s proposals to generate public savings of 1.237 trillion reais (306 billion dollars) over the next decade.

Marinho said the special committee of lawmakers headed up by lawmaker Samuel Moreira currently reviewing the bill is on track to deliver its final verdict within 15 days.

Speaking in Brasilia, Marinho said he was confident Moreira would “respect” the original text, but also noted strong “resistance” to some parts of the bill.

“We cannot anticipate what Moreira’s report will be. We are talking to him and the signs are good, in terms of sharing ideas and making suggestions” Marinho said.

Marinho said the government was in constant dialogue with congressional caucuses, but denied reports of a compromise on proposals for new minimum retirement ages for teachers.

Fiscal transparency is critical to reviving the economy, Marinho said.

Earlier on Monday the central bank’s weekly survey of around 100 financial institutions showed the median forecast for growth this year falling to a new low of 1.24 per cent.

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