GLOBAL ECONOMY

Brazil finance minister picks economist from the opposition as head of Central Bank

Chief Economist of Itau Unibanco, Ilan Goldfajn, in a 2011 file photo.

Chief Economist of Itau Unibanco, Ilan Goldfajn, in a 2011 file photo.  (2011 Getty Images)

Ilan Goldfajn, the chief economist at the Itau Unibanco bank, was named to head Brazil's central bank Tuesday amid the country's worst economic crisis in decades.

Finance Minister Henrique Meirelles said Goldfajn would announce other members of his team once he is confirmed by the Senate. Alexandre Tombini, who had served as the central bank's chief since 2011 under now-suspended President Dilma Rousseff, will stay on the job until then.

Tombini himself praised Goldfajn's "skills and background." The Israeli-born Goldfajn previously worked at the central bank as director and has held jobs at the International Monetary Fund and the World Bank.

Meirelles became Brazil's economy boss last week after acting President Michel Temer took office. At a news conference in Brasilia, the new finance minister said the new administration will gradually win the trust of investors with its appointments and policies.

Brazil's central bank expects the economy to contract 3 percent this year, following a decline of nearly 4 percent in 2015.

Meirelles said the government might have to introduce new taxes, contrary to the desire of most of the protesters, politicians and business leaders who backed the impeachment of Rousseff.

Although Temer's fractious Brazilian Democratic Movement Party has been part of the government since 2005, Meirelles said he still needs a full assessment on the state of the economy to announce concrete measures to stimulate growth.

Meirelles also said he had brought into the Finance Ministry an opposition economist to make assessments on the state of the economy. Mansueto Almeida, a noted critic of government spending, worked with defeated presidential candidate Aecio Neves in his 2014 campaign.

The São Paulo stock exchange closed with a 1.86 percent dip. Brokers blamed foreign news for the fall since they found no surprise in the new economic team, although state-run Petrobras and Banco do Brasil were among the main losers of the day.

Leandro Ruschel, a partner of the Grupo L&S consulting firm, said the stock market is watching how Temer will govern amid the unstable political environment from the deep divisions among Brazilians over Rousseff's impeachment.

"There is still the fact that President Rousseff has not been permanently removed," Ruschel told Agencia Brasil. "The corruption probe at state-run oil giant Petrobras could also bring instability at any moment and involve key figures of Temer's Cabinet."

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