IMF Staff Country Reports

GDP growth in Brazil has been remarkably resilient over the past three years
and, as expected, is showing signs of moderation. The expansion has reflected strong
consumption supported by fiscal stimulus on the demand side, and supply-side factors.
Inflation rebounded in 2024 amid strong demand, a rise in food prices, and currency
depreciation. As inflation expectations rose above the target tolerance interval,
monetary policy entered a new policy tightening cycle in September. Long-standing
challenges remain, including elevated public debt and spending rigidities that crowd
out priority investments. The authorities have made progress on reforms to foster
sustainable and inclusive growth, including implementation of VAT reform.