Brazil: 2020 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Brazil

International Monetary Fund

No 2020/311, IMF Staff Country Reports from International Monetary Fund

Abstract: The COVID-19 pandemic has worsened Brazil’s longstanding vulnerabilities of low potential growth, high income inequality, and weak fiscal position. While the authorities mounted a rapid and effective response to support the economy and protect the poor and vulnerable, the virus outbreak is yet to be brought under control. Outlook and Risks. Real GDP is projected to contract by 5.8 percent in 2020 followed by a partial recovery to 2.8 percent in 2021. With weak domestic demand, inflation is likely to end 2020 substantially below target. Debt is projected to jump to 100 percent of GDP, due to a 10.6 percentage point deterioration in the primary deficit in 2020, and continue to rise over the next five years. The high level of debt exposes Brazil to confidence shocks. Securing congressional passage of structural reforms to raise potential growth remains challenging.

Keywords: ISCR; CR; inflation expectation; reform agenda; liability positions vis-à-vis nonresident; policy stance; debt sustainability risk; firm commitment; COVID-19; Income; Global (search for similar items in EconPapers)
Pages: 102
Date: 2020-12-02
New Economics Papers: this item is included in nep-mac
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