IMF Managing Director visits Brazil

• Pages: 17-19

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To recognize the early repayment of Brazil's outstanding debt to the IMF, President Luíz Inácio Lula da Silva invited IMF Managing Director Rodrigo de Rato to a ceremony in Brasilia on January 10.

Effective economic policies and a favorable global environment have helped to strengthen Brazil's finances over the past three years, making the repayment possible. Brazil and the IMF pledged to remain partners in a continuing economic policy dialogue.

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Brazil resurgent

IMF Managing Director Rodrigo de Rato traveled to Brazil at the invitation of President Luíz Inácio Lula da Silva on January 10-11 to mark the nation's December 2005 repayment of its outstanding obligations (about $15.6 billion) to the Fund. The early repayment-two years ahead of schedule-was made possible by a major improvement in the country's external position, marked by a doubling of exports since 2002, renewed confidence in the economy, and rising capital inflows, which have restored foreign reserves to more comfortable levels.

Meeting in Brasilia with President Lula, Finance Minister Antonio Palocci, Central Bank President Henrique Meirelles, and other senior officials, de Rato praised the economic progress that the country has made since his last visit to the country in September 2004. The government's firm adherence to prudent macroeconomic policies, he said, has laid the basis for a sustained recovery in growth and employment, a steady reduction in inflation, and good progress in reducing poverty and inequality. Brazil has also taken full advantage of a generally favorable world economic environment to expand trade, boost international reserves, and lower its external debt, thus consolidating market confidence in the economy.

President Lula said that the central message of his meeting with de Rato was that "thanks to consistent economic policy, thanks to the committed effort of the government and society as a whole, Brazil is able to say to itself and to the world that it can now walk on its own, that it is doing what needs to be done to keep moving forward without the emergency assistance it has needed from the Fund in the past." In a similar vein, de Rato noted that Brazil "has finally put a long period of macroeconomic instability behind it. As a result, there should be no more 'lost decades,' no more debt crises or record...