Press Release No. <a name="P16_75"></a>03/72

The following statement to the press was made by Anne Krueger, First Deputy Managing Director of the International Monetary Fund (IMF) in Brasilia, on May 20, 2003:

"The past two days have provided my colleagues and me a valuable opportunity to obtain a closer understanding of the much improved economic situation. We were also able to exchange views with a broad range of persons on the economic outlook.

"Yesterday, we met with representatives from the financial, business, and academic communities in Sao Paulo. Today, in Brasilia, I had the privilege to meet with President da Silva and his senior economic and social development officials—Ministers Palocci and Benedita da Silva, and Governor Meirelles.

"I congratulated President da Silva on the exemplary manner in which macroeconomic stability and structural reforms have been taken forward during the relatively short period that his government has been in office. Markets have responded positively to these policies, inflation is coming down, and there has been a marked improvement in many financial indicators. At the same time, we agreed with the need to press ahead with these reform efforts to meet the economic and social challenges confronting Brazil in the medium term.

"In this context, I expressed high regard for the start of pension and tax reforms that the government has submitted to congress, and for the considerable efforts undertaken to generate a consensus across society for them. Passage of these reforms will be a critical step to reduce pension imbalances, as well as inefficiencies in the tax system—thereby strengthening the public finances and creating room for the President's social initiatives. These and other structural measures to make the economy more open and competitive, that are part of the President's reform initiatives, are fundamental to bringing Brazil back to sustained growth and to bringing economic progress to all classes of Brazilian society.

"Thus, I come away from these meetings highly impressed with the commitment to take Brazil forward in both economic and social dimensions. For our part, we remain committed to assisting Brazil create the conditions that will result in sustained and equitable growth."