Brasília – The economy of Brazil should speed up in the next half, boosted by the domestic demand for products and services. The evaluation is by the International Monetary Fund (IMF), disclosed in a report on Friday (20).
Expectations are for the economy of Brazil to grow 4% in the last quarter of this year, partly due to the weak basis for comparison in the last three months of last year and to the effects of the interest rate reduction in the economy.
On the 16th, the IMF had already informed that it expects the Brazilian economy to grow 2.5% this year. For 2013, the IMF forecasts growth of 4.6%, slightly above the potential – partly due to the economic activity generated by preparations for the 2014 World Cup. For the year of the Cup, the growth forecasted by the fund is 4%.
The International Monetary Fund warns that the main risk in the medium term is the growth of inflation above the centre of the target next year – the projections include percentages of 5% next year. Based on such evaluation, the institution’s report forecasts that the government of Brazil should start eliminating stimulus to the economy at the end of this year or early next year.
In a statement to comment the IMF evaluation, the Central Bank emphasized that “the report also points out that the policies adopted since August 2011 should promote a gradual recovery of Brazilian economic activity”. To the Central Bank, the IMF also considered that the monetary and fiscal policies implemented by the Brazil in 2011 and 2012 were positive and adequate to face the foreign economic crisis.
"The report also shows that inflation is converging to the centre of the target and should remain close to it in 2013. Regarding the financial system, the evaluation is that it is robust, well regulated and has adequate supervision and provisions,” adds the press statement.
The Central bank explains that one of the parts played by the IMF is “to follow the economic policies of its members,” like Brazil. To create the document, Brazil received a mission of economists from the fund, who visited the governmental organisations in the economic area and some organisations in the private sector. The IMF delegation took place in Brazil from May 7 to 22 this year.
*Translated by Mark Ament
