News Brief No. 97/24

News Brief: IMF’s Camdessus Welcomes Brazilian Fiscal Policy Package

November 10, 1997

Michel Camdessus, the Managing Director of the International Monetary Fund (IMF) said that "IMF management and staff have been informed by the Brazilian authorities of the main lines of the just-announced package of fiscal adjustment measures for the rest of 1997 and 1998. These measures amount to an estimated Real 20 billion (equivalent to 2-1/4% of GDP) and include substantial cuts in expenditures--excluding more socially sensitive ones--and a range of revenue-raising measures.

"The firm implementation of these measures--in combination with a rapid approval of the constitutional reforms pending before Congress, and with the use of most of the privatization receipts to reduce the public debt--will create the conditions for a rapid improvement in the balance of payments and for an early and sustainable decline in interest rates.

"We welcome this package, which attests to the government’s determination to safeguard the gains made with the Real Plan in disinflation and improved living standards for the Brazilian people," Camdessus said.