Brazilian Planning Minister Nelson Barbosa may replace Joaquim Levy as finance minister, three government sources told Reuters on Friday, as speculation grows about imminent changes to President Dilma Rousseff's economic team. Barbosa, who has kept a low profile in recent months, has the backing of several government insiders and advocates tempering an austerity drive on which Levy has staked his reputation, one of the sources said.
A senior member of Rousseff's economic team, who requested anonymity, said Levy's departure could take place on Friday or in the coming days. In newspaper interviews published on Friday, Levy hinted at his own exit. Another government source with knowledge of the matter said many in Rousseff's administration were pushing for Barbosa to replace Levy, "but the president has not yet decided."
Speculation about Levy's possible resignation has increased this week since Fitch became the second ratings agency to strip Brazil of its coveted investment grade. The decision, though widely expected, marked the sharp reversal in the fortunes of Latin America's largest economy. Levy has suffered a series of defeats since he took office this year and tried to implement an aggressive fiscal adjustment plan to head off a widening deficit that could reach 10 percent of gross domestic product in 2016.