The International Monetary Fund (IMF) released a statement on Monday (1st) praising the “remarkable resilience” of the Brazilian economy in the face of the “multiple shocks” that have occurred in a context of external and internal pressures that the country is experiencing, according to a note from “Agência Brasil”. According to the entity, Brazil is “relatively protected from global increases in oil prices resulting from the war in the Middle East”. This observation takes into account the country's status as an oil exporter and the high participation of renewable energy sources in electricity generation. The statements were released after the conclusion, on Friday (29th), of the annual mission it made to Brazil. According to the head of the mission, Daniel Leigh, the indicators “point to an economic recovery in early 2026”, which should lead the country to a “gradual strengthening of growth to around 2.5% in the medium term”.
Risks
Despite the positive assessment, the IMF warns of risks in the international scenario. “The risks to the growth outlook are tilted to the downside, including deteriorating geopolitical tensions and tightening financial conditions,” warns Leigh. Even so, the institution acknowledges that the country has important pillars of support. “Brazil’s solid political framework, robust financial system, adequate reserves, and flexible exchange rate regime continue to underpin resilience.” The IMF considers the recent interest rate reduction appropriate, but advocates caution in the face of inflationary pressures. It also recommends maintaining and expanding fiscal efforts to ensure debt sustainability and create space for investment. According to the entity, structural reforms and the environmental agenda should drive stronger and more inclusive growth in the medium term.
Global prices
According to the IMF's assessment, the Central Bank adequately reduced interest rates in March and April, in line with the inflation targeting regime. "Maintaining flexibility in future monetary policy measures is justified, given the high uncertainty and new inflationary pressures stemming from high global energy prices," the IMF added, arguing that efforts by Brazilian authorities to strengthen the fiscal situation should continue. "Preserving extraordinary revenues from oil will strengthen the sustainability of public debt, reduce borrowing costs, and create space for priority investments," the document states.
Farm
The IMF's recognition of the resilience of the Brazilian economy was commented on by Finance Minister Dario Durigan. During the closing meeting of the IMF's annual mission to Brazil, the minister reaffirmed that the main goal is to achieve sustainable annual growth of at least 4%. According to him, this result will be driven by a significant increase in productivity. Durigan defended the continuation of government actions aimed at making the State more efficient, "with political leadership capable of conducting serious discussions with society about Brazil's economic challenges and advancing the agenda of fair and sustainable growth." According to the minister, the dialogue with the IMF contributes to supporting efforts in macroeconomic management, which aim at balancing debt and controlling inflation, while strengthening social programs and environmental protection. He reinforced the fiscal commitment, even in the face of external shocks, as a way to guarantee the maintenance of fiscal neutrality in measures to mitigate the impact of the crisis.
This text was translated by machine from Brazilian Portuguese.