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Monday, July 2, 2012

Rousseff still popular despite Brazil's economic lull

(Reuters) - President Dilma Rousseff is enjoying record approval ratings as Brazilians laud her efforts to lower interest rates and jumpstart the country's stalled economy, a poll showed Friday.


The Rousseff administration's approval rating climbed to 59 percent, according to the poll by the National Industry Confederation (CNI) and the Ibope polling institute.

That was a three-point increase from the previous survey in March. Rousseff's personal approval rating, already one of the highest for any elected leader worldwide, remained stable at 77 percent.

The approval, the pollster said, is largely the result of Rousseff's efforts to revive growth in Latin America's biggest economy.

Indeed, 49 percent of those polled approved of her handling of the economy compared to 33 percent three months ago.

After nearly a decade-long investment boom, Brazil's economy in recent quarters has stalled because of the financial crisis in Europe, global uncertainty, and falling demand for commodity exports.

LOWER RATES, HAPPY SHOPPERS

Rousseff has introduced a series of tax breaks and other stimulus measures, and successfully prodded the central bank to lower the country's historically-high interest rates.

A series of seven consecutive cuts by the central bank lowered the benchmark rate to its current level of 8.5 percent, a record low.

Not content with easing by the central bank alone, though, Rousseff also pressured Brazil's giant commercial banks to follow suit - something they haven't always done in a country with a history of economic volatility.

By getting state-owned banks to lower their rates - and publicly upbraiding private lenders for keeping theirs high - she managed an across-the-board reduction by all.

The lower rates have kept credit flowing for Brazilians eager to continue the consumer binge that fueled much of the country's recent growth.

Though loan defaults in recent months have climbed to levels that are troubling some economists, continued access to credit has kept most Brazilians happy.

"They aren't feeling the crisis very much," said Renato da Fonseca, head of polling for CNI, a private industry confederation. "The worsening economy still hasn't had any impact on the government."

Rousseff, 64 years old, had a tough act to follow when she took office in 2011. A little-known bureaucrat and former minister during the administration of President Luiz Inacio Lula da Silva, her predecessor, she was elected because of his immense popularity, his campaigning, and the soaring economy at the time.

With little of the charisma or common touch that gave Lula such widespread support, however, analysts say her star could fall quickly if Brazil's economic woes worsen.

reuters.com

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