{
  "title": "IMF Executive Board Concludes 2025 Article IV Consultation with Brazil",
  "publication": "IMF News, July 17, 2025",
  "sourceUrl": "https://www.imf.org/en/news/articles/2025/07/16/pr-25252-brazil-imf-executive-board-concludes-2025-article-iv-consultation",
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  "summary": "The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for Brazil. The authorities have consented to the publication of the Staff Report prepared for this consultation.",
  "publishDate": "2025-07-17",
  "sections": [
    {
      "heading": "Overview",
      "content": "- The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for Brazil on July 14, 2025.\n- The authorities have consented to the publication of the Staff Report prepared for this consultation.\n- Press Release No. 25/252."
    },
    {
      "heading": "Growth and inflation outlook",
      "content": "- Brazil’s economy grew strongly over the past three years, surprising on the upside, and is showing signs of moderation.\n- Growth projections:\n  - 3.4 percent in 2024.\n  - 2.3 percent in 2025 (projected).\n  - 2.5 percent over the medium term (forecast).\n- Inflation projections:\n  - Inflation expected to reach 5.2 percent by end-2025.\n  - Inflation expected to gradually converge to the 3 percent target by end-2027.\n- Drivers:\n  - Recent expansion reflected strong consumption supported by fiscal stimulus and supply-side factors.\n  - Medium-term support from normalization of monetary policy, implementation of the efficiency-enhancing VAT reform, and acceleration in hydrocarbon production.\n- Short-term dynamics:\n  - Growth to moderate in the near term amid tight monetary and financial conditions, a scaling back of fiscal support, and heightened global policy uncertainty."
    },
    {
      "heading": "Executive Board assessment and policy recommendations",
      "content": "- Executive Directors welcomed strong growth performance, falling unemployment and poverty, and progress in structural reforms.\n- Key recommendations and assessments:\n  - Continue ensuring convergence of inflation to target and secure fiscal sustainability.\n  - Further fiscal steps recommended to put public debt on a firm downward path, facilitate a lower path of interest rates, and open space for priority investments.\n  - Mobilize revenues, including rationalizing inefficient tax expenditures and tackling budget rigidities.\n  - Ongoing VAT reform considered beneficial to simplify the tax system and boost productivity.\n  - Recommend personal income tax reforms to enhance progressivity and domestic revenue mobilization.\n  - An enhanced fiscal framework with a strong medium-term anchor would reinforce credibility and sustainability.\n  - Commended the Central Bank of Brazil’s (BCB) commitment to price stability; monetary policy tightening starting September 2024 judged appropriate and consistent with bringing inflation back to the 3 percent target.\n  - Continued credibility of fiscal and monetary policy frameworks important for anchoring inflation expectations.\n  - Flexible exchange rate regime and adequate FX reserves seen as valuable shock buffers.\n  - Encourage authorities to continue to gradually phase out the financial transaction tax to eliminate a multiple currency practice."
    },
    {
      "heading": "Financial sector and macro-financial risks",
      "content": "- Financial system assessment:\n  - Financial system remains resilient; banks are highly liquid and adequately capitalized.\n  - Commendation for regulatory changes aimed at further strengthening financial sector resilience.\n- Risks and monitoring:\n  - Encourage close monitoring and oversight of household credit risks, including in light of the recently enhanced private payroll loan program.\n  - Commendation for leadership in the financial innovation agenda promoting inclusion, efficiency, and competition.\n  - Suggestion that greater administrative and financial autonomy for the BCB would support technological innovation progress."
    },
    {
      "heading": "Structural reforms, social inclusion, and environment",
      "content": "- Structural and social priorities:\n  - Commended authorities’ leadership in multilateral cooperation and implementation of Brazil’s Ecological Transformation Plan.\n  - Note that Brazil is on track to meet its Nationally Determined Contribution targets and has made progress in reducing deforestation.\n  - Emphasized continued efforts to simplify regulations, strengthen anti-corruption and AML/CFT frameworks, increase labor force participation (especially for women), and facilitate skills upgrading to raise medium-term growth and extend social inclusion gains."
    },
    {
      "heading": "Risks to the outlook",
      "content": "- Balance of risks to growth: tilted to the downside amid heightened global policy uncertainty.\n- Specific upside risks:\n  - Near term: stronger-than-expected household consumption amid a still tight labor market.\n  - Medium term: faster implementation of productivity-enhancing reforms and the Ecological Transformation Plan.\n- Specific downside risks:\n  - External: slowdown in major economies amid heightened global trade tensions and policy uncertainty.\n  - Domestic: larger-than-expected effects from monetary policy tightening; possibility of a lower-than-envisaged fiscal effort which could increase policy uncertainty, raise borrowing costs, weaken investment, and lower growth.\n- Risks to inflation outlook: broadly balanced."
    },
    {
      "heading": "Selected key statistics (as presented in Table 1)",
      "content": "- Social and demographic indicators:\n  - Area (thousands of sq. km.): 8,510\n  - Agricultural land (percent of land area): 30.2\n  - Physicians per 1000 people (2024): 2.8\n  - Hospital beds per 1000 people (2024): 2.5\n  - Population (2024) total (millions): 212.6\n  - Population annual rate of growth (percent): 0.4\n  - Density (per sq. km.): 25.0\n  - Adult illiteracy rate: 5.4\n  - Unemployment rate 7/: 6.9\n  - Net enrollment rates, percent in primary education: 99.4\n  - Net enrollment rates, percent in secondary education: 92.2\n  - Life expectancy at birth (years): 76.4\n  - Infant mortality (per thousand live births): 12.5\n  - Poverty rate (in percent, 2023) 2/: 27.4\n  - GDP, local currency (2024): R$11,745 billion\n  - GDP, dollars (2024): US$2,171 billion\n  - GDP per capita (2024): US$10,214\n  - Palma ratio (2023) 3/: 3.6\n  - Gini coefficient (post taxes and transfers, 2024): 50.6\n  - Main export products: airplanes, metallurgical products, soybeans, automobiles, electronic products, iron ore, coffee, and oil.\n\n- National accounts and prices (selected annual rates and levels):\n  - GDP at constant prices: 2023: 3.2; 2024: 3.4; 2025 (Proj.): 2.3; 2026 (Proj.): 2.1; 2027 (Proj.): 2.2; 2028 (Proj.): 2.4.\n  - Consumption: 2023: 4.2; 2024: 1.6; 2025 (Proj.): 1.9.\n  - Investment (GFCF): 2023: -3.0; 2024: 1.3; 2025 (Proj.): 1.4; 2026 (Proj.): 1.8.\n  - Consumer prices (IPCA, average): 2023: 4.6; 2024: 4.4; 2025 (Proj.): 5.3; 2026 (Proj.): 3.3; 2027 (Proj.): 2.9.\n  - Consumer prices (IPCA, end of period): 2023: 4.8; 2024: 5.2; 2025 (Proj.): 3.8; 2026 (Proj.): 3.0.\n  - Gross domestic investment (private sector): 12.0; 12.8; 12.6; 12.4; 12.3 (years aligned in table).\n  - Gross national saving: 21.8; 19.6; 22.2; 21.3; 19.9; 18.9; 18.6; 18.4 (years aligned in table).\n  - Central government primary balance (national representation, incl. BCB) 4/: 2023: -2.4; 2024: -0.4; 2025 (Proj.): -0.6; 2026 (Proj.): 0.3; 2027 (Proj.): 0.8; 2028 (Proj.): 1.2.\n  - General government NLB primary balance: 2023: -2.2; 2024: -0.2.\n  - General government NLB structural primary balance (in percent of potential GDP): -1.5; -1.4; -0.9; -0.5; 0.2 (years aligned in table).\n  - General government NLB: -7.7; -6.2; -8.5; -7.6; -5.1; -4.8; -4.6.\n  - Net public sector debt: 60.4; 61.5; 65.7; 70.2; 72.6; 74.0; 74.7; 74.3 (years aligned in table).\n  - General government gross debt, Authorities’ definition: 73.8; 76.5; 80.9; 84.5; 86.4; 87.4; 87.8.\n  - General government gross deb: 84.0; 87.3; 91.6; 95.5; 97.6; 98.6; 99.0; 98.9.\n  - Of which: Foreign currency linked: 4.5; 4.7.\n  - Bank loans to the private sector: 7.0; 11.3; 9.2; 7.5; 6.6 (years aligned in table).\n  - Trade balance (US$ billions): 92.3; 65.8; 60.7; 64.8; 67.4; 70.8; 73.5; 76.6.\n  - Exports (US$ billions): 343.8; 339.9; 342.1; 350.1; 360.3; 373.3; 386.8; 400.3.\n  - Imports (US$ billions): 251.5; 274.0; 281.5; 285.3; 292.9; 302.5; 313.4; 323.8.\n  - Current account (US$ billions): -27.9; -61.2; -51.6; -51.4; -51.3; -52.4; -53.0.\n  - Foreign direct investment (net inflows): 37.3; 46.8; 48.4; 50.5; 54.4; 56.5; 58.7.\n  - Total external debt (in percent of GDP): 33.4; 33.1; 34.7; 35.4; 35.2; 34.9; 34.5; 34.0.\n  - Gross official reserves (in US$ billions): 355; 330.\n  - REER (annual average in percent; appreciation +): 4.9; -4.2."
    },
    {
      "heading": "Notes on methodology and sources",
      "content": "- Sources cited in the table: Central Bank of Brazil, Ministry of Finance, IBGE, IPEA, and Fund staff estimates.\n- Footnotes in the original table clarify definitions and data coverage (selected footnotes reproduced in table headings).\n\nIMF Communications Department. Press Release No. 25/252. July 17, 2025.\n\n---\n\n\n References\n\n- Brazil and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- www.imf.org/Brazil\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/07/16/pr-25252-brazil-imf-executive-board-concludes-2025-article-iv-consultation"
    }
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    "Published: July 17, 2025",
    "The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for Brazil on July 14, 2025.",
    "The authorities have consented to the publication of the Staff Report prepared for this consultation.",
    "Press Release No. 25/252.",
    "Brazil’s economy grew strongly over the past three years, surprising on the upside, and is showing signs of moderation.",
    "Growth projections:",
    "Inflation projections:",
    "Drivers:",
    "Short-term dynamics:",
    "Executive Directors welcomed strong growth performance, falling unemployment and poverty, and progress in structural reforms.",
    "Key recommendations and assessments:",
    "Financial system assessment:",
    "Risks and monitoring:",
    "Structural and social priorities:",
    "Balance of risks to growth: tilted to the downside amid heightened global policy uncertainty.",
    "Specific upside risks:",
    "Specific downside risks:",
    "Risks to inflation outlook: broadly balanced.",
    "Social and demographic indicators:",
    "National accounts and prices (selected annual rates and levels):",
    "Sources cited in the table: Central Bank of Brazil, Ministry of Finance, IBGE, IPEA, and Fund staff estimates.",
    "Footnotes in the original table clarify definitions and data coverage (selected footnotes reproduced in table headings).",
    "[Brazil and the IMF](http://www.imf.org/external/country/BRA/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[www.imf.org/Brazil](https://www.imf.org/en/Countries/BRA)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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