The International Monetary Fund says it does not believe the deficit will be zero in 2024; Haddad renews his promise Economy

On Wednesday the 11th of this month, the International Monetary Fund set a less pessimistic scenario for the financial situation in Brazil, but it says it does not believe that Finance Minister Fernando Haddad will be able to close the deficit in public accounts next year. ..as he promised. Despite these expectations, the Minister stressed that he will achieve the basic goals and that this will be possible through additional measures to increase revenues.

According to the Fiscal Monitor report, which was issued yesterday, amid the annual meetings of the Fund and the World Bank, held in Marrakesh, Morocco, the institution said that it expects Brazil to record a primary deficit of 1.2% of gross domestic product (GDP) in 2023, to return To the red zone after recording surpluses in the past two years.

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For 2024, the organization still sees the country in a negative position, with a primary deficit of 0.2% of GDP. Brazil will only put its accounts in the black in 2025, when it should record a primary surplus of 0.2%, as the International Monetary Fund expects. Since then, the Fund sees the country achieving a surplus until 2028.

As for Brazilian debt, the IMF also improved its forecasts, but remained pessimistic. The fund – which takes into account Treasuries held by the central bank – expects Brazil’s debt-to-GDP ratio to grow again this year as well, to 88.1% – in June, that forecast was 88.4%. This data is one of the main indicators of a country’s solvency and is closely evaluated by risk rating agencies. Last year, Brazil’s debt-to-GDP ratio was 85.3%.

Even if the growth rate were lower, Brazil would still carry one of the highest debts as a share of GDP. According to IMF calculations, the country is second only to economies such as Argentina, which has a billion-dollar program with the fund, and Egypt.

Before that, the body’s expectations are more negative. The Fund expects this percentage to reach 90.3% in 2024, and rise to 96.0% in 2028.

The Fund and the World Bank took advantage of the annual meeting to warn of the importance of countries’ attention to public accounts. According to the institutions, once the pandemic is over, it is now necessary to turn off the spending taps, although there are significant pressures on the horizon for public support in an environment of high inflation that is eroding the purchasing power of consumers. “This is really important,” warned Ajay Banga, President of the World Bank.

commitment

Haddad said, in a statement before the International Monetary Fund committee yesterday, once again, that Brazil will eliminate the primary deficit by the end of 2024 and achieve a surplus of 1% of GDP in 2026, which is the last year of the government of President Luiz Inacio Lula da Silva. .