IMF Staff Country Reports

The 2023 Article IV Consultation with Brazil discusses that growth is projected to moderate from 2.9 percent in 2022 to 2.1 percent in 2023. Strong buffers support resilience in the face of prevailing downside risks. On the external front, downside risks include an abrupt global slowdown, a sharp tightening of global financial conditions, and commodity price volatility. On the domestic front, risk mainly stem from renewed fiscal uncertainty and inflation that is more persistent. 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, with NFPS gross debt stabilizing at 97 percent of GDP in IMF staff’s baseline scenario. The balance of risks is tilted to the downside.