Contrite Dilma Rousseff Stands By Brazil's Austerity Programme

Sau Paulo: Brazil's current economic struggles are due in part to prolonged government stimulus that must be cut back, President Dilma Rousseff said on Monday, in a rare public acknowledgment that her policies had contributed to a deep recession.

In a video posted online to mark Brazil's Independence Day, Rousseff renewed her commitment to an austerity agenda amid growing concern in financial markets about the government's slipping budget targets and unrest in her ruling coalition.

"If we made mistakes, and that is possible, we will overcome them and move on," Rousseff said, in one of the clearest signs of contrition from the leftist leader.

Her comments marked a shift in tone from years of speeches blaming Brazil's economic troubles solely on a global slowdown.

"The difficulties and challenges are the result of a long period in which the government spent what was necessary to guarantee employment and wages, ongoing investments and social programs," Rousseff said in the video.

"Now we need to reevaluate those measures and reduce those that should be reduced," she added.

Rousseff also said Brazil's economic difficulties were partly the result of problems faced by some of its main trading partners. China, which recently devalued its currency amid an economic slowdown, is Brazil's largest trading partner.

She also called for "bitter medicine" to strengthen the Brazilian economy, signalling a commitment to austerity measures advanced by Finance Minister Joaquim Levy in an effort to save the country's investment-grade credit rating.

Spending cuts and tax increases have turned congressional allies and fellow ministers against Levy, alienated Rousseff's political base and pushed her approval rating into single digits in recent polls.