May 10, 2017 / 4:15 PM / 6 months ago

Brazil economy 'breathing' as new port rules enacted: Temer

BRASILIA (Reuters) - Brazil’s economy is starting to “breathe” after two years of recession and slowing inflation will allow interest rates to come down further, President Michel Temer said on Wednesday at the enacting of new rules to draw investments in ports.

Brazil's President Michel Temer reacts during a meeting with government leaders of the Brazilian federal senate, at the Planalto Palace in Brasilia, Brazil May 9, 2017. REUTERS/Ueslei Marcelino

“The economy is starting to show signs of growth, in the retail sector and in agribusiness,” Temer said, adding that polls show Brazilians are more optimistic today about the future of Latin America’s largest economy.

Temer signed a decree that will lengthen contracts for operating public ports to 35 years from 25, and allow them to be repeatedly extended for up to 70 years, as Reuters reported on Friday.

The changes are aimed at improving infrastructure crucial to Brazil’s farm sector and expanding its capacity to export commodities from sugar and coffee to soy.

Brazilian farmers produce food at some of the world’s lowest prices, but their competitive edge is undermined by the high cost of transporting it to and shipping it from inefficient and crowded ports.

The government expects the new regulations to attract 25 billion reais ($8 billion) in private investment in port terminals, Transport Minister Maurício Quintella said.

The decree allows investment outside contracted port areas and ends a limit on the expansion of private terminals, he said.

The new rules make it easier for investors to carry out work such as dredging in common port areas and remove restrictions on third-party cargo at private container terminals.

Brazil ranks 55th among 160 countries in the World Bank’s Logistics Performance Index.

Brazil’s annual inflation rate fell in April to its lowest level in nearly 10 years, bolstering the view that there will be a steep interest rate cut by the central bank at the end of this month.

Reporting by Anthony Boadle; Editing by Chizu Nomiyama and David Gregorio

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