Brazil: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Brazil

The 2025 Article IV Consultation highlights Brazil’s strong economic growth over the past three years, which has exceeded expectations. Inflation surged in 2024 due to robust demand, rising food prices, and currency depreciation, surpassing the target tolerance interval. IMF staff anticipates that growth will slow in the near term as inflation returns to target, but will then stabilize at 2.5 percent over the medium term. The shift to a monetary policy tightening cycle in September 2024 was deemed appropriate to bring inflation and inflation expectations back to the 3 percent target. The authorities' ongoing efforts to improve the fiscal position, while addressing social spending and investment needs, are commendable, though further measures are necessary. Brazil is making progress on its sustainable and inclusive growth agenda, with structural reforms and increased hydrocarbon production boosting medium-term growth prospects. Enhancing labor force participation, particularly for women, and improving human capital and reducing informality would further support durable and inclusive growth.