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

December 2, 2020

Preview Citation

Format: Chicago

Brazil: 2020 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Brazil, (USA: International Monetary Fund, 2020) accessed November 21, 2024

Summary

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.

Subject: COVID-19, Expenditure, Health, Income, Labor, Labor markets, National accounts, Public debt

Keywords: COVID-19, CR, Debt sustainability risk, Firm commitment, Global, Income, Inflation expectation, ISCR, Liability positions vis-à-vis nonresident, Policy stance, Reform agenda

Publication Details

Pages:

102
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2020/311
Stock No:

1BRAEA2020002
ISBN:

9781513562674
ISSN:

1934-7685

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