The ratio between Brazil’s debt and its Gross Domestic Product (GDP), the total wealth produced by the country, is "very high," according to the the deputy managing director of the IMF.
International Monetary Fund director Anne Krueger, who is in Brazil for the first time in two years, paid a visit to the Brazilian Ministry of Finance, where she gave an interview.
The country’s debt/GDP ratio currently stands at 51.5%. This means that more than half of what the nation produces would be necessary to repay what the government owes.
Krueger said that one way to solve this problem is for the federal government to continue its fiscal adjustment policy.
She also defended the primary surplus, that is, government spending cuts to cover interest payments on the debt. Krueger believes that, in the long run, this policy will reduce the country’s debt.
According to her, the countries with the best growth in the past ten years are the ones that achieved substantial reductions in their debt/GDP ratios.
ABr