{ "title": "Brazil: Selected Issues", "publication": "IMF Staff Country Reports, July 31, 2023", "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2023/07/31/brazil-selected-issues-537331", "canonical": "https://www.imf.org/en/publications/cr/issues/2023/07/31/brazil-selected-issues-537331", "overlayPath": "/en/publications/cr/issues/2023/07/31/brazil-selected-issues-537331/index.md", "summary": "This Selected Issues paper focuses on challenges and options for reform in Brazil. This paper discusses options to build on the new fiscal rule and enhance the fiscal framework.", "sections": [ { "heading": "Overview", "content": "- Focus: challenges and options for reform in Brazil, with emphasis on building on the new fiscal rule and enhancing the fiscal framework.\n- Central concern: the new rule’s focus on revenues carries important implementation risks, and consolidation that is more ambitious is needed to achieve a downward debt path.\n- Approach: drawing on Brazil’s and cross-country experience with fiscal frameworks to propose options to strengthen the framework." }, { "heading": "Key findings and diagnostics", "content": "- The new proposed fiscal rule addresses important priorities of the new government and offers opportunities for gradual fiscal consolidation over an extended horizon, but important challenges remain.\n- The new rule’s emphasis on revenues creates implementation risks.\n- Consolidation that is more ambitious than currently designed is needed to place public debt on a robustly downward trajectory.\n- There is scope to shape a more comprehensive and integrated fiscal framework that leverages specific advantages of fiscal rules.\n- Further considerations to refine the proposed rule include ensuring consistency between the spending rule and the primary balance targets, while making the primary balance targets more binding.\n- The existing fiscal framework would benefit from a strong fiscal anchor that:\n - puts debt on a firmly declining path;\n - rebuilds buffers; and\n - embeds a medium-term perspective.\n- Additional vulnerabilities and biases identified:\n - a procyclical bias in the fiscal framework;\n - exposure to commodity revenue volatility; and\n - soft budget constraints at subnational government levels." }, { "heading": "Policy recommendations and reform options", "content": "- Make primary balance targets more binding to strengthen the credibility of consolidation.\n- Ensure consistency between the spending rule and primary balance targets to avoid policy conflicts and implementation gaps.\n- Establish a strong fiscal anchor to drive a declining debt path and the rebuilding of buffers with a medium-term orientation.\n- Address procyclical bias by:\n - institutionalizing an escape clause; and\n - considering a mechanism to smooth commodity revenues.\n- Harden budget constraints for subnational governments to reduce fiscal risks and improve aggregate discipline.\n- Leverage cross-country best practices to design a more comprehensive and integrated fiscal framework that balances flexibility and discipline." }, { "heading": "Scope and publication metadata", "content": "- Pages: 75\n- Volume: 2023\n- Issue: 289\n- Series: Country Report No. 2023/289\n- DOI: https://doi.org/10.5089/9798400249266.002\n- Stock No: 1BRAEA2023002\n- ISBN: 9798400249266\n- ISSN: 1934-7685\n- Subject keywords: Fiscal governance, Fiscal policy, Fiscal rules, Fiscal stance, International organization, Monetary policy, Public debt, Revenue administration\n- Additional keywords appearing on the source: alternative investment scenario, Caribbean, climate strategy, Europe, Fiscal governance, Fiscal rules, Fiscal stance, Global, implementation challenge, policy option, spending measure\n\nInternational Monetary Fund. Western Hemisphere Dept. \"Brazil: Selected Issues\", IMF Staff Country Reports 2023, 289 (2023).\n\n---\n\n Content in this bundle\n\n- Brazil: Selected Issues; IMF Country Report No. 23/289; June 30, 2023\n - Brazil: Selected Issues; IMF Country Report No. 23/289; June 30, 2023 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Brazil: Selected Issues; IMF Country Report No. 23/289; June 30, 2023 (PDF){rel=\"external\" type=\"application/pdf\"}" } ], "bullets": [ "[Markdown version](/en/publications/cr/issues/2023/07/31/brazil-selected-issues-537331/index.md)", "[Structured JSON version](/en/publications/cr/issues/2023/07/31/brazil-selected-issues-537331/index.json)", "[Bundle manifest](/en/publications/cr/issues/2023/07/31/brazil-selected-issues-537331/bundle-manifest.json)", "Published: July 31, 2023", "Series: IMF Staff Country Reports", "DOI: https://doi.org/10.5089/9798400249266.002", "Focus: challenges and options for reform in Brazil, with emphasis on building on the new fiscal rule and enhancing the fiscal framework.", "Central concern: the new rule’s focus on revenues carries important implementation risks, and consolidation that is more ambitious is needed to achieve a downward debt path.", "Approach: drawing on Brazil’s and cross-country experience with fiscal frameworks to propose options to strengthen the framework.", "The new proposed fiscal rule addresses important priorities of the new government and offers opportunities for gradual fiscal consolidation over an extended horizon, but important challenges remain.", "The new rule’s emphasis on revenues creates implementation risks.", "Consolidation that is more ambitious than currently designed is needed to place public debt on a robustly downward trajectory.", "There is scope to shape a more comprehensive and integrated fiscal framework that leverages specific advantages of fiscal rules.", "Further considerations to refine the proposed rule include ensuring consistency between the spending rule and the primary balance targets, while making the primary balance targets more binding.", "The existing fiscal framework would benefit from a strong fiscal anchor that:", "Additional vulnerabilities and biases identified:", "Make primary balance targets more binding to strengthen the credibility of consolidation.", "Ensure consistency between the spending rule and primary balance targets to avoid policy conflicts and implementation gaps.", "Establish a strong fiscal anchor to drive a declining debt path and the rebuilding of buffers with a medium-term orientation.", "Address procyclical bias by:", "Harden budget constraints for subnational governments to reduce fiscal risks and improve aggregate discipline.", "Leverage cross-country best practices to design a more comprehensive and integrated fiscal framework that balances flexibility and discipline.", "Pages: 75", "Volume: 2023", "Issue: 289", "Series: Country Report No. 2023/289", "DOI: https://doi.org/10.5089/9798400249266.002", "Stock No: 1BRAEA2023002", "ISBN: 9798400249266", "ISSN: 1934-7685", "Subject keywords: Fiscal governance, Fiscal policy, Fiscal rules, Fiscal stance, International organization, Monetary policy, Public debt, Revenue administration", "Additional keywords appearing on the source: alternative investment scenario, Caribbean, climate strategy, Europe, Fiscal governance, Fiscal rules, Fiscal stance, Global, implementation challenge, policy option, spending measure", "**Brazil: Selected Issues; IMF Country Report No. 23/289; June 30, 2023**" ], "related": [ { "title": "Brazil: Selected Issues; IMF Country Report No. 23/289; June 30, 2023", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/cr/2023/english/1braea2023002.pdf", "summary": { "path": "/-/media/files/publications/cr/2023/english/1braea2023002.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/cr/2023/english/1braea2023002.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/publications/cr/issues/2023/07/31/brazil-selected-issues-537331/index.md", "json": "/en/publications/cr/issues/2023/07/31/brazil-selected-issues-537331/index.json", "bundleManifest": "/en/publications/cr/issues/2023/07/31/brazil-selected-issues-537331/bundle-manifest.json" }, "generatedAtUtc": "2026-09-11T21:10:36.332Z" }