MercoPress. South Atlantic News Agency

IMF top marks for president Lula

Anne Krueger the International Monetary Fund, IMF, First Deputy Managing Director congratulated Brazilian president Luiz Inácio Lula da Silva for his management of the economy and efforts to reform the tax and social security systems.

"I congratulated President Da Silva for the extraordinary way he's advancing in macroeconomic stability and structural reforms", said Ms. Krueger after meeting the Brazilian president in his official residence.

"Inflation is receding, and we agreed on the necessity of advancing the structural reforms that are a mid term challenge for Brazil. I made it a point to congratulate the President for the pensions and tax reforms proposals sent to Congress", indicated the IMF official who was especially invited to Brazil by Finance Minister Antonio Palloci.

If the deficit ridden social security reform is finally approved by Congress, Brazil is estimated will be saving over 18 billion US dollars in thirty years.

Ms. Krueger was also optimistic about Brazil's 2003 inflation target of 8,5%.

"Given the accumulated inflation so far, the target will be difficult to achieve, but since those factors that stimulated inflation last year are reverting, it's still possible to keep to the target", indicated Ms. Krueger.

Inflation in the first four months of 2003 reached 6,5%, but since 2002 was exceptional because of the presidential election that depreciated the Brazilian currency against the US dollar, prices rose two digits for the first time in seven years.

Ms. Krueger last visited Brazil in July 2002 when the country was undergoing financial turbulences and currency exchange volatility since investors were uncertain about a Lula da Silva administration capacity to control inflation or manage the country's 250 billion US dollars foreign debt. Under those circumstances and a few weeks later, the IMF announced a special 30 billion US dollars credit line for Brazil.

However to everybody's surprise the Lula da Silva administration since taking office last January has been most orthodox in the management of the economy, cutting budget outlays and exerting a tight grip on monetary policy that has helped to make inflation recede.