News Briefs
Brazil and the IMF
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Joint Statement of Understanding by the Brazilian Authorities and the IMF Management
- The Brazilian authorities and the IMF management have discussed during the Annual Meetings the main lines of the Brazilian Government’s proposed economic policy framework.
- The authorities have emphasized their determination, highlighted in the September 23 speech of President Cardoso, to put rapidly in place a strong, front loaded and sustained fiscal adjustment program, designed to stabilize the ratio of the public debt to GDP by the year 2000. This will require the achievement as from 1999 of primary surpluses of the overall public sector in the range of 2.5–3 percent of GDP. The government is preparing the policy initiatives needed to ensure this outcome, and intends to announce them as soon as feasible during the month of October.
- The authorities have also emphasized their firm commitment to their current exchange rate regime, the maintenance of a flexible interest rate policy, the non-imposition of any controls on capital outflows, the full service of the external and domestic public debt, and the continuation of their ongoing structural reform efforts in the social security system, the tax system, the budgetary system and institutions, the financial system, the labor market and privatization, among others.
- The IMF management fully supports these policies. Discussions will continue in the days ahead, with the aim of reaching agreement soon on a detailed program of fiscal and other macroeconomic and structural policies, that could be supported financially by the IMF and other members of the international community.
IMF EXTERNAL RELATIONS DEPARTMENT
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