Brazilian Finance Minister Joaquim Levy has resigned, the government’s official news agency said Friday. Levy will be replaced by Planning Minister Nelson Barbosa. Levy’s resignation was widely expected following government action earlier this week to trim a hoped-for 2016 government surplus. Levy plugged for a bigger surplus while Barbosa argued for a smaller margin of savings next year. President Dilma Rousseff favored Barbosa’s position, asking Congress to trim the expected surplus from the equivalent of 0.7% of gross domestic product to 0.5%. In press interviews Thursday and Friday, Levy hinted broadly that he was dissatisfied with government policy and would likely resign. Levy served less than one year as Finance Minister, favoring fiscal austerity and other reforms designed to make Brazil’s economy more competitive. Levy’s tenure was marked by constant conflict within the administration’s economic team. Nor did the Minister have much luck with Congress, which shelved many of the reforms he championed. In 2015, Brazil’s economy plunged into a recession, with GDP expected to contract for the calendar year as a whole by about 3.5%. Meanwhile, inflation soared to over 10% and the country was downgraded to speculative credit status by two major ratings agencies, Fitch and Standard and Poor’s.
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