Brazil economy 'poised' for return to growth: US treasury chief

The US treasury chief praised Brazil's new government on Tuesday and said the Latin American giant is "poised" to exit a painful recession and return to economic growth. Treasury Secretary Jack Lew said after meeting with Brazilian President Michel Temer and Finance Minister Henrique Meirelles that "ambitious" reforms are taking the economy in the right direction. "Brazil’s economy appears poised to return to growth, following the deepest recession in over 100 years," Lew said in comments after talks in Brasilia. "I am convinced that the government’s proposed structural reforms, if passed by Congress, will help the Brazilian economy realize its enormous growth potential, including promoting the strong and balanced growth which is so important to strengthening the middle class and protecting Brazil’s most vulnerable populations," he said. Temer, from the center-right PMDB party, took power in August after leftist president Dilma Rousseff was removed from office in an impeachment trial. Rousseff's claim that the impeachment was a coup in disguise and Temer's deep unpopularity with voters have tested the new president's legitimacy. Temer has also faced scandal over the linking of several of his ministerial choices to a huge corruption scandal centered on state oil company Petrobras. However, with the lengthy impeachment battle over and Temer enjoying far more support than Rousseff in Congress, the government hopes to push through austerity reforms to cut spending and lure back investors to the biggest economy in Latin America. Brazil's GDP shrank 3.8 percent last year and is facing another three-percent contraction this year before returning to growth in 2017. Lew signalled Washington's backing for Temer, saying that "a prosperous Brazil is not only important for the Brazilian people, but also for the United States and the international community."