Plan would significantly streamline the tax regime and could boost The approval of the authorities’ indirect tax reform Protecting social and investment spending, supported by an enhanced fiscalįramework, further broadening of the tax base, and reforms that tackle That continues beyond 2026 to put debt on a firmly declining path, while Staff recommends a more ambitious fiscal effort Sustainability, the authorities aim to achieve a primary fiscal surplus ofġ percent of GDP by 2026. Improve Brazil’s fiscal position. Acknowledging the need to preserve debt “We strongly support the authorities’ commitment to However, strong buffers, including a sound financial system, largeĬash buffers by the public sector, and adequate international reserves, Headline inflation is expected toĬonverge to the target by mid-2025. Headline inflation has rapidlyĭeclined from last year’s peak, but core inflation remains elevated, while We then expect growth to improve to 1.4 percent inĢ024 and 2 percent over the medium term. Growth is projected to moderate this year to 1.2 percent, fromĢ.9 percent in 2022. “Growth is moderating but is expected to rebound next year and over the Team, led by Ana Corbacho, conducted discussions for the 2023 Article IVĬonsultation with the Brazilian authorities and consulted with other Washington, DC: An International Monetary Fund (IMF) Opportunities for greener growth are considerable, including for leveraging Brazil’s competitive advantage in renewable energies. The authorities are embarking on an ambitious agenda to steer a sustainable, inclusive, and green economy. The monetary policy stance is consistent with reducing inflation to target, in line with the inflation targeting framework that has served Brazil well. Bringing inflation down is critical to protect vulnerable households, who are hurt the most by high inflation.Enhancing the fiscal framework, broadening the tax base, and tackling spending rigidities would support sustainability and credibility, while providing flexibility, including for new spending priorities. We strongly support the authorities’ commitment to improve Brazil’s fiscal position.We then expect growth to improve to 1.4 percent in 2024 and 2 percent over the medium term. Growth is projected to moderate this year to 1.2 percent, from 2.9 percent in 2022. Growth is moderating but is expected to rebound next year and beyond.Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country.
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