1. IMF Involvement With Brazil

2. IMF Suggestions for Brazil's Banking and Legal System

3. Infrastructure Improvements and Impact Noticed by the IMF

4. 2018 Article IV Consultation

5. References

IMF Involvement With Brazil

Brazil has had an agreement with the International Monetary Fund (IMF), since they joined as a member on January 14, 1946. Since their agreement with the IMF they have had 16 arrangements ^[1]. They currently do not have any outstanding loans with the IMF and the last time they borrowed money from the IMF was September 6th, 2002.^[2] This means that even through their recent recession of 2016-2017, Brazil did not opt to use the IMF for help in form of a loan. Instead the organization has given Brazil economic advice on ways they can produce economic growth. The IMF stresses that in order for Brazil to have economic success, they must work on increasing the real investment in their country. Following 2014, real investment in Brazil has decreased by 30%, which is far below the average for that time period ^[3]. The IMF concludes that the reason for this drop in investment is caused by an increasing cost of regulated prices like energy cost and labor cost. Brazil also misses out on investment because of a lack of confidence in their markets. However, Brazil was able to improve their terms of trade by cutting funding cost and a rise in profitability. Both of those efforts should assist with an increase in future investment according to the IMF.

IMF Suggestions for Brazil's Banking and Legal System

The IMF is also advising that Brazil looks at reform policies in their banking and legal system. As of December 2018, the largest 6 banks are accountable for nearly 94% of the country’s GDP^[4]. This means that Banco Central do Brasil (BCB) or Brazil’s central bank, has a large control over the credit allocation of the banks. The IMF suggests that if Brazil was able to push towards less state-intervention and privatize the banking sector, that the results would have a positive outcome in terms of growth. The IMF believes that this should be the top priority for Brazil when it comes to making reforms. They also suggests that Brazil should consider improving the efficiency of their court system, because this would allow them to combat corruption, thus adding more confidence when it comes to investing.

Infrastructure Improvements and Impact Noticed by the IMF

The IMF has also made sure that the citizens of Brazil have a voice in what they believe are the top priorities for reforms in the country. Based on an IMF study, the population decided that social policy, gender equality, and infrastructure are the top three most important roles in the development of Brazil respectively. On a trip to Brazil, Christine Legarde (Managing Director of the IMF) noticed the improvement of infrastructure in Rio De Janeiro. She experienced this through riding on newly built cable cars that have been able to increase productivity^[5]. She believes that the new form of transportation has given opportunity for people in the city to use social services they would not have access to without the cable cars. These social services include libraries, access to training for entrepreneurs, and the ability to travel to the bank to collect Bolsa Familia monthly grants. Her and the other board members of the IMF concluded that with the right policy changes, Brazil will have the opportunity for a brighter future.

2018 Article IV Consultation

The IMF executive board recently concluded the 2018 article IV consultation with Brazil. The IMF believes that they have created monetary and fiscal policies that will contribute to the future growth of Brazil’s economy. Brazil has seen a drop in inflation, from 6.3% to 2.9% which is right below their target level^[6]. The IMF claims that this is because of an improvement of expectations and a decrease to food prices based on a great harvest. Although Brazil has struggled with its economy for quite some time, the IMF will continue to help generate policies and reforms that will generate growth for their economy.

References

• Axon Labs
• Axonometric representation
• Axonopathies
• Axonopathy
• Axonopus
• Axon reflex
• Axon terminal
• Axon terminals
• Axopod
• Axoren
• AXP (disambiguation)
• Axpradzor
• AX register
• AXRS
• Axsam
• AxsJAX
• Ax & Smash
• Ax, Smash, and Crush
• Ax:son Johnson family
• Axstone
• AxSTREAM
• Axtaci
• Axtaci, Agsu
• Axtaci, Kurdamir
• Axtaci Mugan