Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education



Front Page

World

UK

UK Politics

Business

Sci/Tech

Health

Education

Sport

Entertainment

Talking Point
On Air
Feedback
Low Graphics
Help

Thursday, December 3, 1998 Published at 11:09 GMT


World: Americas

IMF approves Brazil bailout

Traders in Brazil have been having a rough ride

The International Monetary Fund has approved an immediate $5.3bn emergency payment for Brazil to rescue its economy.

The money is the first instalment in a package worth more than $41bn worked out between Brazil, the IMF and leading industrial nations.


The BBC's Stephen Cviic in Sao Paulo: "The financial crisis in Brazil is showing signs of abating"
The IMF provides about $18bn in instalments with donor governments having pledged the rest.

Brazil has been relatively calm after the disastrous events of August and September, when about $30bn of funds fled the country amid a dramatic loss in confidence, prompting fears of a financial collapse for the world's eighth largest economy.

But the IMF's board of directors in Washington gave a relatively upbeat assessment of Brazil's prospects, predicting growth should resume in 2000 after a recession next year. The board also predicted Brazilian unemployment would rise.

BBC Sao Paulo Correspondent Stephen Cviic says there is considerable international interest in helping Brazil out of its financial difficulties since it is seen as a way of containing the wider global crisis.

Politically unpopular

The Brazilian government has pledged to tackle its huge budget deficit with a tough austerity programme.


[ image:  ]
But the measures are proving politically unpopular and difficult to implement.

On Wednesday the lower house of Brazil's Congress rejected plans to raise civil servants' pension contributions.

President Fernando Cardoso said he was deeply disappointed by the rejection, which he described as incomprehensible.

He warned that further spending cuts would now have to be made in the government's already greatly reduced budget.

A further $4.5bn is due to be released by the IMF in January.

The Brazilian package is one of the biggest ever arranged by the IMF, but still smaller than programmes for South Korea and Indonesia in the wake of the Asia's economic crisis.



Advanced options | Search tips




Back to top | BBC News Home | BBC Homepage | ©




Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia



Relevant Stories

28 Oct 98 | The Economy
Brazil finance measures get thumbs up

05 Oct 98 | The Economy
Is the Brazilian economy going nuts?

20 Sep 98 | The Economy
Grim reaper knocks at Brazil's door

08 Sep 98 | Americas
Brazil announces big budget cuts





Internet Links


Brazilian Development Bank

International Monetary Fund


The BBC is not responsible for the content of external internet sites.




In this section

From Business
Microsoft trial mediator appointed

Safety chief deplores crash speculation

From Entertainment
Taxman scoops a million

Violence greets Clinton visit

Bush outlines foreign policy

Boy held after US school shooting

Memorial for bonfire dead

Senate passes US budget

New constitution for Venezuela

North Korea expels US 'spy'

Hurricane Lenny abates

UN welcomes US paying dues

Chavez praises 'advanced' constitution

In pictures: Castro strikes out Chavez

WTO: arbitration in EU-Ecuador banana dispute

Colombian army chief says rebels defeated

Colombian president lambasts rebels