Brazil Government Announces Measures to Tackle Economic Crisis

Brazil's acting president Michel Temer on Tuesday called on Congress to approve reforms that he said are needed to haul the once booming economy from a crippling recession.

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. Juca was sacked Tuesday, the government announced.

Temer opened a government meeting in the capital Brasilia saying 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 ($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 plan later Tuesday.

The primary budget deficit is revenues before debt interest payments and 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 credit 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, who was vice president, into power.

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-orientated policies.

Temer, who was heckled live on television by activists shouting "putschist" during a public appearance Monday, dismissed such attacks Tuesday as "psychological aggression."