In a report on the global fiscal situation the IMF said that “deterioration in Brazil’s fiscal accounts is particularly pronounced.”
The government is expected to miss by a “wide margin” its 2011 target for a budget surplus before interest payments equal to 3 percent of gross domestic product, the IMF report said.
Mantega, speaking to reporters in Brazilian capital Brasília, said he tried unsuccessfully to call IMF Managing Director Dominique Strauss-Kahn this morning to discuss the report and will try reaching him again later.
“I think the managing director of the IMF must have gone on vacation and some of the orthodox, old men of the IMF got distracted and wrote this stupid thing about Brazil,” Mantega said. “It’s totally wrong.”
The central government’s budget surplus before interest payment widened more than expected in December, the finance ministry said today. The so-called primary surplus widened to 14.4 billion reais (US$ 8.6 billion) last month, beating all seven estimates in a Bloomberg survey whose median forecast was for a 8.6 billion reais surplus.
The central government’s surplus was 2.16 percent of GDP last year, the ministry said in a report. The target, which does not include contributions from state-run companies and local governments, was 2.15 percent.
Mantega said that Brazil will meet its fiscal targets this year after following the IMF’s advice and increasing spending during the global financial crisis to help Latin America’s largest economy exit recession.
The country’s deficit is one of the lowest in the world, and net debt will fall to 38 percent of GDP this year from 41 percent in 2010, he said.
Carlo Cottarelli, director of the IMF’s fiscal affairs department, told journalists that Brazil doesn’t face any “immediate risk” from a “relatively modest” increase in its deficit this year. Still, the country’s fiscal position could be stronger than it currently is, Cottarelli said.