LatinNews Daily - 1 August 2023

* The executive board of the International Monetary Fund (IMF) has released its latest economic assessment of Brazil, which included positive comments about the country’s “rapid recovery from the pandemic” and “ample buffers and proactive policies” to mitigate risks such as a potential “abrupt global slowdown, a sharp tightening of global financial conditions, and commodity price volatility”. The IMF has projected an annual GDP growth rate of 2.1% in 2023 and expects Brazil’s headline inflation rate to reach 5.4% by the end of the year. IMF directors praised the central bank (BCB)’s “proactive” monetary policy response, having maintained a high benchmark interest rate of 13.75%, noting that inflation was still above the BCB’s annual target of 3.25% +/-1.5, despite the recent “slow decline in core inflation”. The assessment was also optimistic about the government’s legislative initiatives for a new fiscal framework and tax reform, as well as welcoming its plans for “green growth”.