Brazil: 2023 Article IV Consultation-Press Release; Staff Report; Staff Supplement; and Statement by the Executive Director for Brazil

IMF Staff Country Reports, July 31, 2023

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Growth is projected to moderate from 2.9 percent in 2022 to 2.1 percent in 2023.
Gross domestic product (GDP) growth is moderating but is expected to gradually improve toward staff’s estimate of potential over the medium term.
With the monetary policy stance remaining in restrictive territory, inflation would converge to target by mid-2025.
An improvement in the nonfinancial public sector (NFPS) primary balance of around 3 percent of GDP is projected over the medium term, contingent on the implementation of measures.
NFPS gross debt is projected to stabilize at 97 percent of GDP in IMF staff’s baseline scenario.
The balance of risks is tilted to the downside.

External risks:
- An abrupt global slowdown.
- A sharp tightening of global financial conditions.
- Commodity price volatility.
Domestic risks:
- Renewed fiscal uncertainty.
- Inflation that is more persistent.

Monetary policy: Staff projects the monetary policy stance to remain in restrictive territory to achieve inflation convergence by mid-2025.
Fiscal projection conditionality: The projected improvement of around 3 percent of GDP in the NFPS primary balance over the medium term is explicitly contingent on the implementation of measures.