IMF says Brazil's New Tax And Pension Reforms Are 'Crucial'

by Amanda Banks, Tax-News.com, London

19 March 2003

The International Monetary Fund (IMF) has said that proposed new tax and pension reforms are "crucial" to the economic development of Brazil.

In a statement released on Monday, Anne Kreuger, First Deputy Managing Director of the IMF announced: "The new administration is moving decisively to deal with underlying vulnerabilities, demonstrating a commitment both to sound macroeconomic policies and to its ambitious structural reform agenda."

The IMF gave its final approval to a massive $30 billion loan deal late last week, which will release an initial instalment of $4.1 billion.

"The government's initiatives in tax and pension reform are especially crucial," said Kreuger, commenting on the tax reform package being put forward by the administration of President Luiz Inacio Lula da Silva, who was elected last year. However, she stressed that Brazil needs to remain faithful to the IMF's program in order to ensure that sustainable economic growth is possible in the years ahead.

The IMF spokeswoman also praised anti-inflationary measures put in place by the new government, which has seen interest rates raised several times in the last few months. These measures were now showing early signs of curbing inflation, she said.

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