Brazil: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Brazil

IMF Staff Country Reports, July 23, 2019

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Growth is projected at 0.8 percent in 2019.
Growth is projected to accelerate in 2020 conditional on the approval of a robust pension reform and favorable financial conditions.

The current budget is guided by the federal expenditure ceiling, entailing a minor reduction of the structural primary balance in 2019.
Fiscal policy is expected to be mildly supportive in 2019 and subsequently turn moderately contractionary to respect the constitutional ceiling.
Gross public debt is projected to peak in 2024 at 96 percent of gross domestic product.
Given the high and increasing level of public debt, fiscal consolidation is essential.
The government should preserve a broadly neutral fiscal stance in 2019.

The review encouraged the authorities to step up implementation of structural reforms essential to raise potential growth, including:
- Improving the business environment.
- Lowering trade barriers.
- Boosting productivity.
Additional decisive structural reforms identified as needed to raise potential growth:
- Tax reforms.
- Privatization.
- Trade liberalization.
- Measures to enhance the efficiency of financial intermediation.

Subject: External debt, Fiscal stance, Pension reform, Public debt, Real interest rates
Keywords: CR, debt, interest, ISCR, reform agenda

Brazil: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Brazil