Brazil’s finance minister to discuss world crisis at IMF meeting

Brazil’s Finance Minister Guido Mantega flies on Tuesday (Apr. 8) to the US to attend the  Spring Meeting of the International Monetary Fund (IMF) and the World Bank. Before his trip, he is expected to meet with UK Chancellor George Osborne.

The topic to be discussed at the IMF is the world’s current economic situation, which still suffers from the effects of the crisis started in 2008, notably Europe’s major issues: tension in Ukraine and the consequences of Crimea’s annexation by Russia for the local economy.

In Washington, Brazil will resume the debate on reforms to the IMF, one of the most important issues raised by the country, but to no avail since 2012. According to Brazil, the reforms aim to provide developing countries with more power of decision in the organization. President Dilma Rousseff has been critical of the Fund’s current structure as she believes its work has not reflected the world’s “new arrangement of forces.”

Another topic in the agenda is the creation of a BRICS Bank (BRICS include Brazil, Russia, India, China and South Africa), which should partially replace the World Bank and the International Monetary Fund as providers of credit to developing countries.

Mantega’s trip coincides with IMF’s announcement of a new growth forecast for the Brazilian economy this year. Their prediction is down to 1.8% from a 2.3% rate estimated in January.

The IMF’s forecast for 2015 stands at 2.7%, down 0.2 percentage points from what had been predicted in January.

As regards inflation in Brazil, IMF foresees 5.9% this year and 5.5% in 2015.

In the IMF’s analysis, the Brazilian economy should move at a slow pace. The Fund mentions shortages in domestic supplies, which are chiefly due to problems in infrastructure and persistently low private investments, resulting in reduced competitiveness and trust among investors.

Translated by Fabrício Ferreira