Brazil : Stability for Growth and Poverty Reduction
The importance of macroeconomic stability for growth, and poverty reduction is now accepted in Brazil. As of 1964, the country followed responsible macroeconomic policies, in the pursuit of stability, reconfirmed by the new Government in January 20...
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| Format: | Country Economic Memorandum |
| Language: | English en_US |
| Published: |
Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2003/01/2170153/brazil-stability-growth-poverty-reduction http://hdl.handle.net/10986/14881 |
| Summary: | The importance of macroeconomic
stability for growth, and poverty reduction is now accepted
in Brazil. As of 1964, the country followed responsible
macroeconomic policies, in the pursuit of stability,
reconfirmed by the new Government in January 2003. The
report focuses strictly on three key macroeconomic issues,
critical to assure stability, avoid crises, and hence allow
poverty reduction on a sustainable basis. Though much has
been achieved, stability, and higher growth in Brazil now
depend on reforms along three main axes: Structural fiscal
reforms, to allow flexible public spending towards a higher
primary surplus; moving towards a different public debt
composition; and, ensuring an external adjustment,
sustainable and in tandem with higher growth. The report
argues for reducing volatility, and uncertainty to achieve
sustainable growth, and poverty reduction, and, based on its
analysis, it further argues for a debt management strategy
that includes gradual lengthening of maturity, and duration
of debt; indexing more debt to prices, and reducing
indexation to policy interest rates, or the exchange rate;
issuing fixed-coupon instruments; and, making judicious use
of alternative financial instruments, in addition to
coordinating monetary policy, and public debt management, so
that reserve requirements may be lowered, leading to more
efficient cash markets. |
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