News Brief: Statement by IMF Managing Director on Brazil
September 23, 1998
Statement by IMF Managing Director on Brazil
Michel Camdessus Managing Director of the International Monetary Fund (IMF), said: "The recent turbulence in international financial markets, which has adversely impacted emerging market economies worldwide, has hit Brazil especially hard. The Brazilian authorities have already responded to these external pressures with a sharp increase in interest rates and significant fiscal measures, including substantial spending cuts and the strengthening of institutional mechanisms to monitor developments in the public finances and take further timely corrective actions, if needed.
"I am very encouraged by President Cardoso’s speech today and in particular by his firm determination to give high priority in the immediate future to securing a further strong improvement in Brazil’s public finances, with a sizable primary surplus already in 1999, and the acceleration of the congressional approval of the structural fiscal reforms, including a legal framework mandating the balancing of the budget over the medium term.
"Brazil’s success in this effort is very important not only for the Brazilian people, but also for its partners in Latin America and for the international community at large. In recent weeks, the authorities have intensified their open and constructive dialogue with the IMF, with a view to ensuring that adequate financial support could be quickly arranged, if needed. For its part, the IMF will not spare any effort to reach with the Brazilian authorities the understanding mentioned by President Cardoso. In such a framework, the IMF would be ready to provide appropriate financing to support a strong and credible Brazilian program," Camdessus said.