Brazil: 2020 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Brazil
IMF Staff Country Reports, December 2, 2020
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- Brazil: 2020 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Brazil
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Bibliographic details
- Published: December 2, 2020
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513562674.002
Pandemic impact and structural vulnerabilities
- The COVID-19 pandemic has worsened Brazil’s longstanding vulnerabilities of low potential growth, high income inequality, and weak fiscal position.
- The authorities mounted a rapid and effective response to support the economy and protect the poor and vulnerable.
- The virus outbreak is yet to be brought under control.
Outlook and macroeconomic projections
- Real GDP is projected to contract by 5.8 percent in 2020.
- Real GDP is projected to recover to 2.8 percent in 2021.
- With weak domestic demand, inflation is likely to end 2020 substantially below target.
Public debt and fiscal outlook
- Debt is projected to jump to 100 percent of GDP.
- The debt increase is due to a 10.6 percentage point deterioration in the primary deficit in 2020.
- Debt is projected to continue to rise over the next five years.
- The high level of debt exposes Brazil to confidence shocks.
Policy challenges and reform prospects
- Securing congressional passage of structural reforms to raise potential growth remains challenging.
- Authorities’ rapid fiscal and social response helped protect vulnerable groups, but longer-term measures are needed to address weak potential growth and fiscal sustainability.
Source: Brazil: 2020 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Brazil (IMF Staff Country Report No. 2020/311).
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