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:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Brazilian Tile Maker Wants Bigger Chunk of Foreign Pie

Gyotoku, a company from the southeastern Brazilian state of São Paulo, specialized in products ...

108,000 Firearms Turned In by Brazilians

Brazil’s NGO, Viva Rio, celebrated its Disarmament Campaign Day yesterday with demonstrations throughout the ...

Herbie Mann: Brazil Was Home Too

Herbie Mann became one of the first American jazz artists to record bossa nova. ...

Brazil Offers Credit to Help End Widespread Trash Dumps

Garbage disposal is a common problem for all Brazilian cities. Most of them do ...

Brazil and Colombia in Joint Effort to Fight FARC and Drugs

Brazil and Colombia will be signing this weekend a defense agreement by which the ...

Brazil: Making a Difference amid Abject Poverty

The Pastoral da Criança (the Children’s Ministry) is a social program of the Catholic ...

Brazil Approved to UN Security Council Seat by a Landslide

Brazil, Nigeria, Lebanon, Gabon and Bosnia were elected Thursday to non-permanent seats on the ...

The Time Has Come to End Lula’s Monarchy in Brazil

The downpour of odd government decisions,  apparently meaningless presidential phrases and so much propaganda perhaps ...

Brazil Discovers Huge Oil Field and May Become Major Oil Exporter

Petrobras, Brazil's state-controlled oil company, announced Thursday, November 8, that it has discovered as ...