By Alonso Soto
BRASILIA (Reuters) - Brazil's incoming finance minister Joaquim Levy promised more realistic fiscal targets and balanced economic growth on Thursday, aiming to rebuild investor confidence after years of weak growth and erratic economic policies.
Levy's first public comments after President Dilma Rousseff confirmed his appointment underscored a focus on shoring up public finances and restoring transparency to the federal budget after Rousseff's narrow re-election victory last month.
"Hitting our targets is fundamental to increase confidence in the Brazilian economy and lay the foundation for recovering economic growth," Levy told reporters in a news conference.
Levy said there were no immediate measures to be announced but he and the rest of Rousseff's economic team would begin work immediately on the transition into the second term, starting with a look at where to cut spending.
The benchmark Bovespa stock index <.BVSP> reversed losses as Levy began his remarks, but swung back into negative territory as he explained there were no immediate measures forthcoming.
Levy said he would take steps to boost private savings, increase productivity and bring balance to the economy, which has suffered three years of mediocre growth and high inflation, and slipped into recession earlier this year.
A former executive at Banco Bradesco
But even before taking office, Levy faced vocal opposition from some leaders in the governing coalition warning that government spending cuts will kill jobs and push Brazil's economy back into recession.
In his clearest break with outgoing Finance Minister Guido Mantega, Levy promised a more modest but more transparent public savings target NEXT (NXT.LO)year.
In recent years, Rousseff's government has resorted to accounting tricks and transfers from its sovereign wealth fund to meet its fiscal targets, eroding its credibility with investors and credit rating agencies.
The government will work with a primary surplus target of 1.2 percent of gross domestic product (GDP) in 2015, down from a previously announced range of 2 percent to 2.5 percent, Levy told reporters.
In 2016 and 2017 the primary surplus target, or government revenue minus spending before debt payments, should return to at least 2 percent of GDP, he said.
The government also announced the appointment of Nelson Barbosa, a former deputy finance minister, as Rousseff's new planning minister, while central bank chief Alexandre Tombini was asked to stay in his post.
"We don't have any details of what they are planning yet," said Newton Rosa, chief economist at SulAmerica Investimentos in Sao Paulo. "The market is giving Levy the benefit of the doubt at first ... When they first detail the measures they are going to adopt, they must show consistency and realism."
(Reporting by Alonso Soto and Luciana Otoni; Writing by Brad Haynes; Editing by Gunna Dickson and Kieran Murray)
