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UPDATE 1-Brazil finance minister sees only brief delay for pension overhaul
May 22, 2017 / 4:36 PM / 7 months ago

UPDATE 1-Brazil finance minister sees only brief delay for pension overhaul

(Adds comments by Meirelles and Finance Ministry officials)

By Silvio Cascione and Marcela Ayres

BRASILIA, May 22 (Reuters) - Brazilian Finance Minister Henrique Meirelles said on Monday a corruption scandal would only briefly delay an overhaul of the country’s pension system and not interrupt a broad reform agenda, even if President Michel Temer leaves office.

“The reform agenda at this point became part of the Congress agenda. The most important leaders of Congress have already understood that the fiscal measures have to be approved, and we are moving forward,” Meirelles said, adding that he expects a pension reform vote, previously set for as early as the end of this month, to be delayed by a few weeks.

The government’s ambitious goal of approving a thorough overhaul of labor and social security regulations this year has been in doubt since the disclosure last week of a recorded conversation in which Temer appears to condone hush money payment to a jailed lawmaker.

Meirelles told investors on a conference call that he expects Temer, who has resisted growing calls for his resignation, to stay in office through 2018, when his term ends.

If Temer is forced from office, a potential replacement would have to picked by Congress in an indirect election without clear candidates, stoking fears of lingering political instability and a protracted recession.

Meirelles has been mentioned by local media as a top candidate to win an indirect election, but the minister has declined to discuss the topic publicly.

Temer’s administration will move ahead with short-term economic measures while it works to rebuild support in Congress, Mansueto Almeida, secretary for economic monitoring at the Finance Ministry also told investors.

Separately, the finance ministry believes it is too early to revise economic growth forecasts for this year, according to Fabio Kanczuk, secretary of economic policy at the finance ministry.

The government forecasts growth of about 1 percent in the first three months of 2017 on a quarterly basis and a smaller but still positive rate in the second quarter, which would put an end to Brazil’s two-year-long recession, its worst on record. (Editing by W Simon and JS Benkoe)

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