Brazil president urges economy reforms

Brazil's acting president Michel Temer today called for reforms to haul Latin America's biggest economy back from crippling recession and slammed what he called "psychological aggression" against his government.
Temer, who took power May 12 after the suspension of president Dilma Rousseff pending her impeachment trial, is seeking to cement his authority in the face of multiple challenges on both the economic and political fronts.
He faces accusations from Rousseff of having engineered a coup, and suffered a blow when secret recordings were leaked Monday in which his key ally, planning minister Romero Juca, allegedly discusses a plot to remove Rousseff as a way of halting a huge corruption probe.

Juca, a pointman on economic reforms, was sacked today, the government announced.
Opening a meeting with ministers and congressional allies in the capital Brasilia, Temer said that restoring economic growth will require strong medicine.
"I want to emphasize that it won't be 12 days or two months that will pull Brazil out of crisis," he said.

The government says it is facing a record 170.5 billion reais (USD 48 billion) primary budget deficit in 2016, far higher than suspended president Rousseff's earlier target of a 97 billion reais deficit.
To try and balance the books, Temer is proposing austerity measures and bringing efficiency to the bloated government. Congress was due to debate the plans later today.

The primary budget deficit is the difference between government spending and revenue, excluding interest payments on debt. It is a key indicator for creditors.
All three main ratings agencies consider Brazil's credit rating as junk. Fitch Ratings made its latest cut to Brazil's rating earlier this month, lowering by two points to BB with a negative outlook.
In addition to high inflation, the effect of low commodity prices, and rising unemployment, investors are spooked by Brazil's political instability. Rousseff's trial could go on as long as six months and she has vowed to fight all the way.
The leftist leader is accused of illegal accounting tricks in 2014 and 2015 to mask the depth of government shortfalls. She says the maneuvers were common practice with previous governments and not an impeachable crime, alleging that the issue was blown out of proportion in order to get Temer, her vice president, into office.

Temer, from the center-right PMDB party which used to be in coalition with Rousseff's Workers' Party, has moved quickly to lay out plans to shift Brazil to more market-oriented policies, prompting an outcry from the left.
Temer, who was heckled live on television by activists shouting "putschist" during a public appearance yesterday, dismissed such attacks today as "psychological aggression.