IMF Applauds Brazil’s Decision do Cut Umbilical Cord from the Fund

On March 21 the Executive Board of the IMF completed the tenth and final review of Brazil’s performance under the SDR (Special Drawing Right) 27.4 billion (about US$ 41.8 billion) stand-by arrangement, which was originally approved in September 2002 and is scheduled to expire at end-March 2005.

The Brazilian authorities and Fund staff and management have jointly considered the future form of relations between Brazil and the IMF.


In light of the sound macroeconomic and institutional framework in place, the government’s commitment to pursuing further reforms, and a balance of payments position much stronger than earlier anticipated, the Brazilian authorities have decided not to request Fund support under a successor arrangement. The IMF staff and management fully support the authorities’ decision.


The decision by the authorities reflects the impressive results, generally ahead of expectations, of Brazil’s macroeconomic stabilization and reform policies that have been supported by the current arrangement.


Underpinned by these policies and a favorable global environment, economic activity has rebounded strongly in 2004, led by robust growth in private consumption and a sharp recovery in investment, bringing real GDP growth to over 5 percent-its highest level since 1994.


External performance has been remarkable, with the trade and current account balances close to record surpluses at present, and net international reserves rising to more comfortable levels. Moreover, inflation is being reduced steadily under the inflation targeting framework.


A consistently strong fiscal performance has contributed to reducing the level and improving the structure of public debt and has greatly assisted in preserving macroeconomic stability, while private sector efforts to strengthen balance sheets have led to a marked decline in external indebtedness.


These developments have significantly lessened economic vulnerabilities and bolstered confidence in the economy. The authorities are committed to continuing with their reform agenda, and further steps to strengthen public finances, through reforms on the social security system, have just been announced and are welcomed by IMF staff and management.


The Brazilian authorities and the staff and management of the IMF look forward to continuing with the close and cooperative policy dialogue between Brazil and the IMF through the usual channels of surveillance and post-program monitoring.


The above is a statement on Brazil by the International Monetary Fund (IMF) Managing Director, Rodrigo de Rato.


IMF

Tags:

Ads

You May Also Like

Brazil’s Corruption Probe Scares Investors

Latin American markets were once again mixed, only this time the tables were turned ...

Brazil Gets Cutting-Edge Wine Lab in Semi-Arid Region

The Brazilian Agricultural Research Corporation (Embrapa) for the Semi Arid region, in the city ...

Animal Feed Factory from Brazil Expands

BioBase Animal Feed has expanded its factory in Àguas Frias, in the interior of ...

Getting Ready for Cuban Democracy in Brazil

The Constitution of Brazil seems to fully protect freedom of expression for intellectual, artistic, ...

Protest march in Brazil

Unhappy with Slow Pace of Change Brazil’s Left Wants New Economic Model

Assuming a second term of office, Brazilian President Luiz Inácio da Silva told Congress: ...

China Gives Green Light to Brazilian Chicken

Once again Brazil will be able to export chicken meat to China, which is ...

New Law in Brazil Should Help Family Agro-Industry

Brazilian President Luiz Inácio Lula da Silva signed a decree this Friday, March 31, ...

Saudis Open the Door Again to Brazil’s Factory

Pormade, a wooden door factory located in the city of União da Vitória, in ...

Brazil and Botswana Sign Five-Year Accord to Fight AIDS

During today’s visit of Botswana’s President, Festus Mogae, the governments of Botswana and Brazil ...

Another Normal Day at Brazil Airports: Cancellations, Delays and Chaos

Chaos in Brazilian civil aviation continues this week. From midnight to 10 am today, ...