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Brazil: Selected Issues and Statistical Appendix

Author(s):
International Monetary Fund
Published Date:
September 1999
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IX. Strengthening social policy Instruments1

A. Background

1. The impact of the recent financial crisis in Brazil on output, formal sector employment, and prices turned out to be less severe than anticipated.2 For instance, the GDP decline in 1999 is now expected to be around 1 percent—significantly smaller than the 3.8 percent projected in January. However, the effect of economic slowdown and real exchange rate depreciation on both poor and near-poor households—who mostly derive livelihood from the informal sector—is not yet known.3 To meet the contingency of higher poverty as well as to alleviate existing poverty, social policy instruments should be strengthened and made more cost-effective. Brazil already allocates considerable resources to various social programs. Improving their cost-effectiveness is critical when fiscal retrenchment is the key element of ongoing economic reforms in Brazil.

B. The Poor and Their Characteristics

2. The latest available data for 1997 suggests that 22.6 percent of the Brazilian population (36 million) lives below the poverty line.4 Poverty declined by roughly one-third from more than 30 percent of the population in 1993. Around 80 percent of the poor work but do not earn enough. They are found predominantly in rural areas, in the Northeast, and possess less than four years of formal education. About half of the population below the poverty line is in the informal sector.

3. The poverty situation in Brazil has to be evaluated in the context of the country’s relatively high-income inequality. The income share of the richest 20 percent was 64.2 percent—26 times the share of the poorest. However, the initial years of the Real Plan appear to have benefited disproportionately low-income groups. The Gini coefficient was estimated at 0.61 in 1995, down from 0.63 in 1994. The improvement in the income position of low-income households, particularly in the nontraded sector, has been attributed to the fall in inflation and the appreciation of the real exchange rate, which increased the relative price of nontradeables that are relatively more intensive in unskilled labor.5 During 1994–97, the income gains of workers in the nontradeable sector (including those displaced from the formal sector and who found refuge in this sector) have been estimated to be significantly larger than those employed in the tradeable sector.6

4. Both the poverty headcount and Gini have begun to increase since 1997. The resources needed to eliminate poverty are estimated to be small, at around VA percent of GDP, particularly in relation to spending on existing social programs of 19 percent of GDP.

C. Existing Social Policy Instruments

Overall spending on social programs

5. As noted earlier, a substantial share of consolidated government spending—over 19 percent of GDP in 1995—is devoted to social programs (Table 9.1).7 However, the vast majority of this spending is not well targeted to the poor and do not focus primarily on countercyclical poverty reduction.

Table 9.1.Consolidated Government Outlays on Social Programs, 1995
ProgramFederalStales and

Municipalities
Total
(In millions of reais)
Social insurance and social assistance54.614.368.9
Social security (RGPS and RJU)48.614.362.9
Unemployment insurance3.50.03.5
Social assistance and other2.50.02.5
Education and culture5.523.128.5
Health5.213.218.5
Housing and urbanization0.67.17.7
Total65.957.8123.6
(In percent of GDP)
Social insurance and social assistance8.42.210.7
Social security (RGPS and RJU)7.52.29.7
Unemployment insurance0.50.00.5
Social assistance and other0.50.00.5
Education and culture0.83.64.4
Health0.82.02.9
Housing and urbanization0.11.11.2
Total10.28.919.1
Sources: IPEA; MARE; and IMF staff estimates.

6. More than half of social spending is on the two public social security programs. The Regime Geral da Previdência Social (RGPS) covers workers in the formal, private sector; while the Regime Jurídico Único (RJU) covers public sector workers at all levels of government. Financial imbalances in the RGPS and RJU are at the core of Brazil’s fiscal problems. The combined primary deficit in these two programs totaled 4.7 percent of GDP in 1998; including interest on accumulated deficits, the two programs account for more than the general government deficit. The primary goals of the ongoing reforms are to improve equity, and the fiscal and actuarial soundness of these programs.

7. Although the pension systems are not designed to fight poverty directly, the minimum pension in the RGPS can be an important source of income support for the poor. Roughly 70 percent of all beneficiaries—primarily rural workers, for whom special criteria apply, and urban workers, especially women, who meet the minimum length of service requirements for an old-age pension—receive this minimum benefit, which accounts for approximately 35 percent of total benefits. Included in this group are roughly 1 million beneficiaries who receive minimum benefits on the basis of age or disability, despite short length of service (the Renda Mensal Vitalícia program).8

8. The unemployment insurance program provides countercyclical income smoothing for the same formal-sector workers who belong to the RGPS. Unlike the RGPS, however, the unemployment insurance program is adequately funded by Fundo de Amparo ao Trabalhador (FAT) through a turnover tax.9 Since formal sector workers are better paid and have other sources of income for periods of unemployment (severance pay and a mandatory saving plan), they are much less likely to fall into poverty during the current economic slowdown. 10

9. Brazil currently invests a larger than average share of its GDP on health and education, but with relatively poor results, especially in education. This is partly the outcome of institutional rigidities in financing mechanisms, and the mismatch between centralized financing and decentralized provision. Brazil is currently working with the World Bank to improve the efficiency and equity of spending in these sectors.11 Given that states and municipalities control most current outlays, the federal government has little discretion to reprogram resources in the short term.

10. In summary, a cursory look at broad aggregate spending on social programs reveals that relatively few resources are available to counteract a short-term increase in poverty, especially if attention is restricted to spending at the federal level. Moreover, existing programs are subject to substantially greater scrutiny in the current fiscal situation; the benefits that accrue from any use of resources to counteract poverty will have to be weighed against the benefit of fiscal adjustment. Poverty alleviation can yield important benefits in the short term, but fiscal adjustment will pay long-term dividends for the poor in Brazil.

The core social programs

11. To ensure delivery of critical social services in the near term, the authorities, in collaboration with the World Bank and the DDB, have identified a set of 22 core social programs that are relatively cost-effective and should be protected while more comprehensive restructuring of the social sector is undertaken. The 22 core programs are listed in (Table 9.2) 12 Several of these programs are recent innovations designed to improve the delivery of public services. Reflecting their value, the share of GDP devoted to them has increased from 1.1 percent in 1997 to roughly 1.2 percent in 1998–99, at the same time that spending on other programs was substantially cut.

Table 9.2.Federal Spending on 22 Core Programs, 1997–99(In millions of reais)
Program19971998Proj.

1999
Performance

targets 1999
Education1,3051,9492,283
School lunch program67378590335.4 million students
National Education Development and Maintenance Fund100425816n/a
Provision of textbooks28837025560 million books
Fundescola09321082,000 schools
Primary schools2292528351,000 schools
School health1524161.8 million students
Health2,4482,5712,718
Floor on financing for basic health services15721,7221,7805,500 municipalities
Family health program162226379100,000 providers (w/equip)
National immunization program16317319315.0 million vaccinations
Pharmaceutical assistance basic drug program4203511604,000 municipalities
Child nutrition10259158830,000 children
2940488 million women
Women’s health program
Labor4,4365,1595,275
Unemployment insurance3,5494,1824,323(n/a)
Salary bonus5325796404.3 million workers
Labor training3553993121.7 million workers
Social Assistance1,1941,5711,847
LOAS (income support for the elderly and disabled)7921,1401,435712,000 beneficiaries
Support for children (in kind)2192181801 million children
Bolsa Escola (cash incentive to maintain school enrollment)00100(to be defined)
Support for disabled (in kind)59614988,000 disabled
Support for adolescents83863184,000 beneficiaries
Child labor eradication15403044,000 beneficiaries
Support for elderly (in kind)262622189,000 aged
Total9,38311,25112,123
Memorandum item:
Total as share of GDP1.11.21.2
Sources: Ministry of Planning and Budget; and Fund staff estimates.

12. Despite their long-term value, the 22 core programs provide limited protection against poverty during an economic downturn. Almost half of the money devoted to these programs goes to unemployment insurance. This program is obviously countercyclical, but focuses on relatively higher-income formal sector workers. Of the programs in education and health, the school lunch and health programs and the floor on financing of basic health services can provide needed nutrition and health care to those who are hardest hit by an economic downturn, provided they are adequately funded.13 The social assistance programs—especially the LOAS, Bolsa Escola, and child-labor eradication programs, since they provide income support to the most needy—14 have the greatest potential for mitigating poverty.

13. In conclusion, even taking account of a substantial share of resources spent on minimum pensions in the RGPS, total spending in programs that are likely to mitigate an increase in poverty over the short term is less than 1 percent of GDP. However, the most important gap in social policy instruments in Brazil is the absence of a program that directly addresses income losses of workers in the informal sector.

D. Options for Strengthening Social Policy Instruments

14. Although formal sector unemployment has begun to fall, and the output decline has plateaued, it is important to strengthen social policy instruments to help the existing poor and near-poor to withstand income losses during 1999 and to ensure their access to critical social services. Such an approach would complement the ongoing economic adjustment and reforms. The following options would improve social protection at a low budgetary cost.

Implement a workfare program

15. A workfare program that seeks to transfer income principally to poor, informal sector workers would help to protect their consumption until the economy resumes strong growth. The program could focus on labor-intensive activities in poor communities (urban infrastructure, childcare and health, education). This type of program was implemented in 1998 in the Northeast in the aftermath of the drought, and benefited around 1 million people.1516 It was financed by a loan from FAT.

16. The authorities have already responded to meet the short-term income needs of the poor. A workfare program along the lines of the program implemented by the municipality of São Paulo is under consideration by the federal government. The federal program would target 1 million workers and pay one minimum wage per month during six months. Beneficiaries would also attend retraining courses (two hours per day).17 The cost of the program to the federal government is estimated at R$1.4–R$1.5 billion. As with the Northeast drought program, financing could be provided through FAT.18

Strengthen funding for Lei Orgânica da Assistência Social (LOAS)

17. As noted earlier, the LOAS program is the primary mechanism for providing cash support to the elderly and the disabled living in poverty.19 Less than half of the applications for disability benefit are approved and their targeting is problematic. The funding for LOAS was increased in the revised fiscal program for 1999 from R$1,116 million to R$1,435 million to ensure timely payments to 33,000 beneficiaries estimated in November 1998 and any new beneficiaries due to the economic slowdown. However, the monitoring of eligibility and compliance should be improved to ensure that the program’s resources are well targeted.20

Strengthen the Bolsa Escola Program (Programa de Garantia de Renda Minima)

18. Bolsa Escola provides income support to poor families to maintain their children (7 to 14 years of age) at school. The national program was motivated by successful initiatives undertaken by a number of state governments. The 1999 budget provides R$100 million for this program, R$215 million less than in the initial budget proposal. Extending this program could prevent school drop out rates from increasing and also act as a countercyclical poverty alleviation measure.21 Because funding is provided jointly by the federal and municipal governments, one difficulty with raising federal allocations is that contribution from the municipalities may not always be forthcoming.22

STATISTICAL APPENDIX
Table 1.Brazil: Macroeconomic Flows and Balances
1994199519961997Est.

1998
(In percent of GDP)
Total domestic expenditure99.6101.8102.1102.2101.9
Consumption77.579.581.480.682.8
General government17.919.619.219.220.0
Private sector59.659.962.261.462.8
Investment22.122.320.721.619.1
General government3.62.52.32.22.3
Private sector and public enterprises 1/18.519.818.419.416.8
Saving22.122.320.721.619.1
Gross national saving21.824.923.625.823.4
External saving0.3-2.6-3.0-4.1-4.3
Sources: Brazilian Institute of Geography and Statistics (IBGE); and Fund staff estimates.
Table 2.Brazil: GDP and Real GDP per Capita
GDP in current reaisGDP in millions of 1998 reaisReal GDP per capita in 1998 reaisImplicit GDP deflator (percent change)Population (millions)Real GDP annual percent changes
Agriculture & livestockIndustryServicesTotal
19861,274711,650.55,285.1149.2134,653-8.011.78.17.5
19874,038736,771.85,367.4206.2137,26815.01.03.13.5
198829,376736,329.75,266.3628.0139,8190.8-2.62.3-0.1
1989425,595759,597.85,337.71,304.4142,3072.82.93.53.2
199011,548,795726,555.35,042.32,737.0144,091-3.7-8.2-0.8-4.3
199160,285,999734,038.85,013.7416.7146,4081.40.32.01.0
1992640,958,768730,075.04,910.2969.0148,6844.9-4.21.5-0.5
199314,097,114,182765,994.65,075.11,996.2150,933-0.17.03.24.9
1994349,204,679,000810,805.35,294.42,240.2153,1435.56.74.75.9
1995646,191,517,000845,021.35,440.677.6155,3194.11.94.54.2
1996778,820,353,000868,343.95,513.917.3157,4824.13.71.92.8
1997866,827,479,000900,299.05,639.77.4159,6362.75.51.23.7
1998901,405,984,832901,406.05,571.53.9161,7900.2-0.90.80.1
Source: Brazilian Institute of Geography and Statistics (IBGE).
Table 3.Brazil: National Accounts at Current Prices(In millions of reais)
1994199519961997Est.

1998
Consumption expenditure270,644513,562633,826705,341746,157
General government62,388126,652149,601157,084180,515
Private sector208,256386,910484,224548,257565,643
Gross capital formation77,333144,027161,013184,282172,143
General government12,60916,38217,89520,48121,003
Private sector and public enterprises64,725127,645143,118163,801151,141
Total domestic expenditure347,978657,589794,838889,623918,301
Net exports of goods and nonfactor services1,227-11,397-16,018-22,796-16,895
Exports33,22049,91755,46965,49164,980
Imports31,99361,31471,48688,28781,875
GDP at market prices349,205646,192778,820866,827901,406
Net factor payments abroad-6,765-11,192-15,822-19,486-25,000
GNP at market prices342,440635,000762,998847,341876,406
Net unrequited transfers received from abroad2,5883,9742,8992,3762,204
Gross national income at market prices345,028638,974765,897849,717878,610
Sources: Brazilian Institute of Geography and Statistics (IBGE); and Fund staff estimates.
Table 4.Brazil: National Accounts at Constant Prices(In 1985 millions of reais)
1994199519961997Est.

1998
Consumption expenditure4,688.05,261.05,438.75,735.05,775.2
Percent change8.612.23.45.40.7
Gross capital formation892.7957.8978.21,092.61,046.7
Percent change14.37.32.11L7-4.2
Total domestic expenditure5,580.66,218.76,416.96,827.66,821.9
Percent change9.411.43.26.4-0.1
Net exports of goods and nonfactor services (GNFS)277.7-113.2-142.8-321.4-309.2
Percent change 1/-2.8-6.7-0.5-2.80.2
Exports of GNFS12091163.11267.21415.81454.0
Percent change3.2-3.89.011.72.7
Imports of GNFS931.31276.31410.11737.21763.2
Percent change26.437.010.523.21.5
GDP at market prices5,858.36,105.56,274.06,506.26,512.7
Percent change5.94.22.83.70.1
Net factor payments abroad-109.7-103.8-109.3-135.1-168.5
GNP at market prices5,748.66,001.86,164.76,371.16,344.2
Percent change6.84.42.73.3-0.4
Sources: Brazilian Institute of Geography and Statistics (IBGE); and Fund staff estimates.
Table 5.Brazil: Industrial Production(Annual percentage change)
1994199519961997Est.

1998
Total7.61.81.73.9-2.3
Mineral extraction4.73.39.87.212.4
Manufacturing industry7.81.71.13.6-3.5
Nonmetallic minerals3.14.16.37.4-0.5
Metallurgy10.2-1.81.66.0-3.8
Machinery21.1-4.5-12.87.2-4.1
Electrical and communications equipment19.014.64.7-1.8-10.1
Transportation equipment13.44.1-0.310.7-15.1
Wood-2.6-3.42.13.9-7.3
Furniture1.26.213.7-1.5-8.2
Paper and cardboard2.80.42.92.90.5
Rubber4.0-0.3-0.54.1-8.1
Leather and hides-4.3-16.7-1.9-1.7-13.6
Chemicals6.6-0.55.05.13.7
Pharmaceuticals-2.518.1-8.611.44.3
Perfumes, soaps and candles2.55.34.15.23.0
Plastics4.19.711.33.6-2.6
Textiles3.8-5.8-5.8-6.5-7.0
Clothing, footwear and cloth goods-2.1-6.9-2.5-6.7-4.8
Food products2.27.75.31.01.3
Beverages10.417.2-3.3-0.3-2.6
Tobacco-14.8-5.112.522.2-22.7
Memorandum items:
Capital goods18.70.3-14.14.8-1.8
Intermediate goods6.50.22.94.6-0.9
Consumer goods4.46.25.31.2-5.6
Durable15.114.511.23.5-20.2
Semidurable and nondurable1.94.23.70.5-1.2
Source: Brazilian Institute of Geography and Statistics (IBGE).
Table 6.Brazil: Retail Sales in the São Paulo Metropolitan Area(Seasonally Adjusted)(1988 average = 100)
General CommerceConsumer Goods 1/Durable GoodsSemidurablesNondurablesAutomobileConstruction Materials
199474.370.876.651.577.2102.746.8
199577.178.188.663.981.791.144.7
199671.875.987.358.178.876.338.5
199767.770.076.351.076.975.837.0
199864.772.375.741.884.756.631.4
1996
January68.574.081.761.578.763.738.8
February69.773.785.555.776.473.938.7
March71.976.992.657.178.973.139.2
April71.075.186.758.778.172.438.7
May71.876.388.657.078.575.937.6
June70.675.086.556.177.873.038.8
July74.578.591.061.180.377.137.9
August72.776.287.457.778.976.837.6
September73.476.890.657.678.283.138.1
October72.976.887.159.480.083.037.9
November74.277.687.757.780.381.239.4
December70.573.982.657.579.582.939.0
1997
January73.672.883.353.876.690.039.2
February71.372.985.552.574.783.039.6
March71.373.579.957.282.480.037.6
April73.272.581.858.575.386.842.0
May69.873.182.453.277.878.637.1
June68.270.075.654.677.978.437.4
July65.368.271.051.676.971.734.5
August65.568.072.247.376.368.636.6
September66.168.172.646.076.177.936.1
October65.767.472.346.775.576.935.6
November63.067.170.148.475.765.734.7
December60.066.068.942.577.052.033.1
1998
January63.769.975.845.178.659.333.8
February64.070.071.149.280.760.932.6
March63.168.974.944.180.261.231.5
April64.670.773.240.582.858.731.5
May64.671.473.443.684.159.332.7
June65.473.879.040.585.856.631.5
July64.872.274.239.985.757.831.3
August67.674.378.941.286.959.733.4
September63.773.171.543.187.451.830.3
October64.574.877.139.088.750.329.8
November64.573.977.238.088.950.730.1
December66.275.082.637.986.853.028.9
1999
January66.977.182.737.290.047.428.6
February64.076.478.839.389.530.127.9
March64.376.179.838.190.238.528.4
April64.175.776.638.290.537.528.0
May63.977.079.739.792.234.428.8
Source: State of São Paulo Commerce Federation.
Table 7.Brazil: Price Statistics(Monthly percentage change)
General Price Index 1/ (IGP-DI)Wholesale Price Index (IPA-DI)Construction Cost Index (INCC)Consumer Price Index (INPC)
1994
January42.1941.2845.9341.32
February42.4143.2339.1440.57
March44.8343.6555.7143.08
April42.4640.2045.6042.86
May40.9538.4745.6042.73
June46.5845.5044.7448.24
July5.474.413.587.75
August3.344.400.141.85
September1.551.790.381.40
October2.552.711.322.82
November2.472.182.362.96
December0.570.171.321.70
1995
January1.360.873.501.44
February1.150.582.091.01
March1.811.083.301.62
April2.301.992.302.49
May0.40-2.038.772.10
June2.621.553.122.18
July2.242.241.092.46
August1.291.730.621.02
September-1.08-2.420.671.17
October0.23-0.140.860.63
November1.331.490.731.51
December0.27-0.610.861.65
1996
January1.791.311.521.46
February0.760.470.110.71
March0.22-0.070.980.29
April0.700,410.250.93
May1.681.342.161.28
June1.220.941.541.33
July1.091.380.751.20
August0.00-0.050.230.50
September0.130.410.220.02
October0.220.240.260.38
November0.280.240.580.34
December0.881.210.590.33
1997
January1.581.670.320.81
February0.420.340.480.45
March1.161.590.730.68
April0.590.530.230.60
May0.300.140.860.11
June0.700.241.110.35
July0.09-0.090.510.18
August-0.04-0.151.18-0.03
September0.590.920.270.10
October0.340.410.150.29
November0.831.080.540.15
December0.690.870.230.57
1998
January0.880.750.330.85
February0.02-0.150.480.54
March0.230.130.470.49
April-0.13-0.28-0.500.45
May0.230.130.980.72
June0.280.170.390.15
July-0.38-0.610.34-0.28
August-0.17-0.040.22-0.49
September-0.020.060.01-0.31
October-0.03-0.190.010.11
November-0.18-0.20-0.05-0.18
December0.981.740.050.42
1999
January1.151.580.550.65
February4.446.990.991.29
March1.982.840.551.28
April0.03-0.340.520.47
May-0.34-0.820.860.05
June1.021.350.410.07
Sources: Brazilian Institute of Geography and Statistics (IBGE); and Getulio Vargas Foundation.
Table 8.Brazil: Consumer Price Index

(IPC-FIPE) 1/

(Monthly percentage change)

GeneralFoodPersonal

Expenses
HousingTransportationClothingHealth

Care
Education
1994
January40.3043,0136.1335.9742.5239.3344.2153.16
February38.1939.1038.4038.6736.9631.9343.3239.49
March41.9447.1139.3141.7741.0427.9142.1147.08
April46.2244.4048.4147.3447.2647.7242.7143.53
May45.1037.5947.0445.1646.7869.3245.1944.11
June50.7553.6948.0149.2849.4354.7348.5145.08
July6.958.777.775.339.972.077.951.48
August1.952.74-0.273.710.510.601.54-0.57
September0.82-0.27-0.763.880.77-1.820.99-0.07
October3.176.390.494.280.19-0.541.150.19
November3.024.750.873.80-0.144.251.810.69
December1.250.101.084.02-0.13-1.022.171.10
1995
January0.80-0.821.532.71-0.24-0.413.531.54
February1.320.592.293.23-0.30-1.382.750.96
March1.920.741.024.110.14-2.322.5614.87
April2.640.813.623.290.906.312.757.48
May1.97-1.332.033.830.578.062.456.84
June2.66-0.071.304.524.593.675.514.49
July3.722.293.635.745.74-1.296.193.51
August1.431.312.494.11-0.12-5.462.281.08
September0.74-0.271.272.390.24-0.480.610.46
October1.480.642.471.843.34-0.311.290.58
November1.172.121.091.62-0.02-0.990.450.62
December1.210.320.413.780.59-1,802.880.57
1996
January1.821.760.182.67-0.56-1.182.7716.24
February0.40-0.160.772.160.61-4.890.922.56
March0.23-0.22-0.212.310.16-6.081.204.71
April1.620.660.901.184.664.390.43-0.02
May1.340.051.671.110.307.961.900.64
June1.410.340.711.255.421.251.350.56
July1.311.08-0.061.384.37-1.604.390.11
August0.34-0.290.362.11-0.27-2.261.53-0.25
September0.07-0.430.631.120.13-2.300.59-0.27
October0.580.64-0.040.621.140.730.32-0.13
November0.340.110.040.560.251.280.000.09
December0.17-1.410.500.442.400.331.400.75
1997
January1.231.511.340.332.75-2.711.208.83
February0.010.760.100.43-0.22-3.630.25-0.18
March0.211.59-0.150.40-0.05-4.340.380.22
April0.64-0.37-0.100.47-0.077.701.040.21
May0.55-1.37-0.411.960.025.301.220.12
June1.420.93-0.121.902.892.690.940.01
July0.11-0.28-0.130.751.20-1.750.50-0.13
August-0.76-1.420.280.53-0.30-5.440.82-0.33
September0.01-0.020.730.36-0.22-1.970.490.18
October0.220.680.770.12-0.28-0.940.17-0.08
November0.530.790.070.460.790.230.260.48
December0.570.810.260.341.120.300.470,03
1998
January0.241.01-0.43-0.150.55-2.590.174.39
February-0.160.32-1.85-0.101.82-3.211.28-0.25
March-0.230.79-0.16-0.200.24-5.180.470.21
April0.620.36-0.030.07-0.236.59-0.61-0.14
May0.520.73-0.36-0.24-0.325.34-0.110.12
June0.19-0.19-0.180.23-0.022.200.260.22
July-0.77-1.48-0.13-0.26-0.58-1.900.040.21
August-1.00-1.37-0.310.05-1.87-3.49-0.10-0.10
September-0.66-0.14-0.36-0.18-0.73-5.010.120.23
October0.020.32-0.11-0.13-0.430.170.140.17
November-0.44-0.52-0.32-0.35-0.86-0.490.26-0,05
December-0.12-0.37-0.050.060.71-1.370.42-0.06
1999
January0.500.790.230.182.51-2.260.041.27
February1.413.070.770.742.69-1.94-0.030.17
March0.560.781.040.461.51-1.01-0.14-0.80
April0.47-1.180.170.500.456.531.310.27
May-0.37-1.960.120.10-0.151.911.21-0.01
June-0.08-1.20-0.060.020.692.030.580.23
Source: Brazilian authorities.
Table 9.Brazil: Relative Public Sector Prices and Tariffs 2/

(Average 1991=100) 1/

ElectricityTelecommunicationPetroleum ProductsAlcoholMail
GasolineDieselNatural Gas
December 1991110.799.796.0103.095.798.094.5
December 1992106.697.383.7131.486.586.283.8
December 1993125.7111.883.3135.6119.3152.1101.6
December 1994104.386.870.9120.673.7127.979.4
1995
January102.985.669.8118.872.4126.078.3
February101.784.669.0117.471.5124.577.5
March99.983.167.8115.370.3122.376.1
April97.781.366.2112.768.7119.674.4
May97.380.965.9112.268.4119.074.1
June94.878.964.2109.370.2115.972.2
July92.777.162.8106.973.9113.370.6
August91.676.262.0105.573.0111.969.7
September92.677.063.0107.373.7113.770.5
October92.376.864.9111.173.6117.1108.3
November97.577.764.1109.672.6115.5124.7
December108.798.663.9109.372.4115.2124.3
1996
January117.498.362.8107.492.0113.2122.2
February119.997.362.1106.391.1112.0120.9
March119.697.162.0106.090.9111.8120.6
April118.896.470.2105.390.2127.7119.8
May116.994.969.4103.688.7126.2117.8
June115.493.768.5102.387.7124.7116.4
July114.292.767.8101.286.7123.3115.1
August114.292.767.8101.286.7123.3115.1
September114.092.667.7101.186.6123.2115.0
October113.892.467.6100.986.4122.9114.7
November113.592.167.4100.686.2122.5114.4
December112.591.370.2103.985.4133.8113.4
1997
January110.789.973.2107.384.1146.5111.7
February110.389.572.9106.883.7145.9111.2
March109.088.572.1105.682.8144.2109.9
April116.688.071.7105.082.3143.4109.3
May116.390.471.4104.782.0142.9108.9
June115.589.871.0104.081.5141.9108.2
July115.489.770.9103.981.4141.8129.5
August115.489.870.9103.981.4141.9129.5
September114.789.270.5103.381.0141.0128.8
October114.388.970.3102.980.7140.6128.3
November113.488.272.9104.580.0139.4127.3
December112.687.676.1106.579.5138.4126.4
1998
January111.686.875.5105.578.8137.2125.3
February111.686.875.4105.578.8137.2125.3
March111.486.675.3105.378.6136.9125.0
April111.586.775.4105.478.7137.1125.1
May111.286.575.2105.278.5136.8124.9
June110.986.375.0104.978.3136.4124.5
July111.486.675.3105.378.6136.9125.0
August111.686.875.4105.578.7137.1125.2
Source: Central Bank of Brazil.
Table 10.Brazil: Open Unemployment Rate 1/(In Percent)
199419951996199719981999
Annual average5.14.65.45.77.6
January5.54.45.35.27.37.7
February5.44.35.75.67.47.5
March5.94.46.46.08.28.1
April5.44.46.05.87.98.0
May5.24.55.96.08.27.7
June5.44.65.96.17.9
July5.54.85.66.08.0
August5.54.95.55.97.8
September5.15.25.25.77.6
October4.55.15.15.77.5
November4.04.74.65.47.0
December3.44.43.84.86.3
Source: Brazilian Institute of Geography and Statistics (EBGE).
Table 11.Brazil: Employment and Real Wages in Industry in São Paulo
(Average 1989 = 100)(Monthly Percent Change)(Annual Percentage Change)
Industrial EmploymentAverage Real WageIndustrial EmploymentAverage Real WageIndustrial EmploymentAverage Real Wage
1990December93.887.7-2.2-3.1-8.2-26.1
1991December88.795.8-1.1-0.5-5.49.2
1992December81.5109.5-0.8-2.5-8.114.3
1993December80.4114.6-0.5-1.7-1.44.6
1994January80.2107.6-0.2-6.1-1.33.6
February80.0107.7-0.30.1-1.64.8
March79.6117.6-0.49.2-2.25.8
April79.4121.8-0.33.5-2.711.5
May79.3123.2-0.21.2-3.012.4
June79.2120.4-0.1-2.3-3.212.5
July79.1113.0-0.1-6.1-3.43.1
August78.8115.3-0.42.0-3.57.9
September78.9116.40.10.9-3.011.4
October79.3117.40.60.9-2.210.7
November79.5127.60.28.7-1.59.5
December79.5130.80.02.5-1.114.2
1995January79.9126.30.5-3.4-0.417.4
February80.3124.60.5-1.30.415.7
March80.7128.50.53.11.39.3
April80.8130.70.11.71.87.4
May80.6132.0-0.21.01.77.2
June80.0129.5-0.7-1.91.07.6
July79.1126.3-1.1-2.50.011.7
August77.2127.4-2.40.9-2.010.5
September76.1122.8-1.4-3.6-3.55.5
October75.3124.5-1.11.4-5.16.1
November74.8133.5-0.67.2-5.94.6
December73.9137.0-1.12.7-7.04.8
1996January73.3134.1-0.8-2.1-8.26.2
February72.8134.2-0.70.0-9.47.7
March72.4135.2-0.50.8-10.25.2
April72.2135.7-0.30.4-10.63.8
May71.9135.4-0.4-0.3-10.82.5
June71.6133.2-0.5-1.6-10.52.9
July71.3133.9-0.40.5-9.86.0
August70.8135.4-0.81.1-8.36.3
September70.5135.0-0.3-0.3-7.39.9
October70.4136.2-0.20.9-6.59.4
November70.2138.6-0.41.8-6.23.8
December69.5141.2-0.91.9-6.03.0
1997January69.4140.6-0.1-0.4-5.34.8
February69.3138.8-0.1-1.3-4.73.4
March69.3141.00.01.6-4.34.3
April69.2142.4-0.21.0-4.24.9
May69.1145.7-0.12.3-3.97.6
June69.1141.60.0-2.8-3.56.2
July68.7142.0-0.50.3-3.66.1
August68.3144.0-0.61.4-3.46.4
September68.2142.4-0.2-1.1-3.45.5
October67.8143.3-0.60.6-3.85.2
November67.4146.9-0.52.5-3.96.0
December66.8148.9-0.91.4-3.95.5
1998January66.2145.2-0.9-2.5-4.73.3
February65.9143.9-0.4-0.9-4.93.7
March65.7148.4-0.43.2-5.35.3
April65.6147.2-0.1-0.8-5.13.4
May65.6150.00.01.9-5.03.0
June65.5146.9-0.2-2.1-5.33.7
July65.3149.5-0.21.8-5.05.3
August64.9151.2-0.61.1-5.05.0
September64.8149.4-0.2-1.2-5.04.9
October64.4150.2-0.60.6-5.04.9
November63.4155.2-1.53.3-6.05.7
December62.5159.7-1.42.9.-6.47.3
1999January61.9152.6-1.0-4.4-6.55.1
February61.3146.0-0.9-4.3-7.01.5
March61.0145.2-0.6-0.6-7.2-2.2
April60.9145.9-0.10.5-7.2-0.9
Source: Central Bank of Brazil.
Table 12.Brazil: Minimum Wage Statistics
Nominal

(R$ per month)
Real Index

(1986=100) 1/
Percentage Change

in Real Terms 2/
Annual averages
19910.070.210.4
19920.165.2-7.2
19932.471.910.3
199447.765.0-9.6
199591.373.513.1
1996108.075.52.7
1997117.377.42.5
1998126.780.64.0
Quarterly averages
19930.575.410.1
1.070.02.0
2.472.210.0
5.669.820.7
199415.270.3-6.8
39.259.4-15.1
66.565.7-9.0
70.064.6-7.5
199575.066.0-6.0
90.074.425.3
100.078.419.3
100.075.216.5
1996100.072.69.9
108.076.32.5
112.076.9-1.8
112.076.31.4
1997112.075.03.3
117.377.51.6
120.078.92.5
120.078.42.8
1998120.077.02.6
126.780.13.3
130.082.54.6
130.082.75.5
1999130.080.95.1
134.081.82.2
Source: Central Bank of Brazil.
Table 13.Brazil: Nominal, Operational, and Primary Balances of the Nonfinancial Public Sector 1/2/(In percent of GDP)
19941995199619971998
Total borrowing requirement44.27.15.96.18.0
Central government 3/16.82.32.62.65.5
States and municipalities19.03.52.73.02.0
Public enterprises8.51.30.60.40.5
Monetary correction44.82.32.11.80.5
Operational balance (deficit -)0.5-4.8-3.8-4.3-7.5
Central government1.6-1.6-1.6-1.8-5.2
States and municipalities-1.0-2.3-1.8-2.2-1.8
Public enterprises-0.1-0.8-0.3-0.3-0.5
Interest payments (net) 4/3.85.13.73.37.6
Central government1.52.22.01.45.8
States and municipalities1.52.11.31.51.6
Public enterprises0.90.80.40.40.2
Primary balance (deficit -)4.30.3-0.1-1.00.0
Central government3.10.60.4-0.30.6
States and municipalities0.5-0.2-0.6-0.7-0.2
Public enterprises0.8-0.10.10.1-0.4
Sources: Central Bank of Brazil; Ministry of Finance; and Fund staff estimates.
Table 14.Brazil: Summary Operations of the Public Sector 1/(In percent of GDP)
19941995199619971998
Nonfinancial revenue33.232.929.930.331.2
Tax revenue24.224.321.921.722.2
Direct taxes3.84.24.03.94.8
Federal VAT (IPI)2.12.02.01.91.8
State VAT (ICMS)6.87.27.16.86.7
IOF0.80.50.40.40.4
Financial transactions tax (CPMF)------0.80.9
Trade taxes0.50.70.50.60.7
Earmarked social taxes4.14.14.14.03.8
Social security contributions5.34.95.25.15.1
Other tax revenue3.12.20.50.40.4
Minus: public enterprise taxes-2.2-1.8-1.9-2.2-2.3
Nontax revenue9.08.78.18.69.0
Value added federal enterprises5.34.24.54.84.4
Sales8.77.07.67.46.8
Minus: purchases-3.4-2.8-3.0-2.6-2.5
Other revenue from federal enterprises1.30.91.21.00.5
Other2.43.62.42.84.1
Nonfinancial expenditure28.932.630.031.231.2
Current expenditure22.225.627.126.826.8
Wages and salaries12.713.612.512.012.2
Transfers5.15.96.16.36.8
Pension benefits4.74.95.35.46.0
Subsidies, grants, BNDES0.50.90.80.90.9
Other current4.36.18.58.57.8
Capital expenditure4.64.13.94.24.3
Investment4.23.82.93.13.4
Other0.40.31.01.00.9
Primary deficit state and municipal enterprises0.90.50.20.20.2
Float and adjustment1.22.4-1.30.1-0.1
Of which:
FAT adjustment-0.4-0.5-0.4-0.2-0.2
Adjustment and float1.53.0-0.90.30.1
Primary balance (deficit -) 2/4.30.3-0.1-1.00.0
Federal government3.00.60.4-0.30.6
State and municipal governments0.5-0.2-0.6-0.7-0.2
Public sector enterprises0.8-0.10.10.1-0.4
Net financial expenditure 3/3.85.13.73.37.6
Domestic3.14.63.23.07.3
Foreign0.70.50.50.30.3
Operational balance (deficit -)0.6-4.8-3.8-4.3-7.6
Federal government1.6-1.6-1.6-1.8-5.2
State and municipal governments-1.0-2.3-1.8-2.2-1.8
Public sector enterprises-0.1-0.8-0.3-0.3-0.5
PSBR44.27.15.96.18.0
Sources: Central Bank of Brazil; Ministry of Finance; and Fund staff estimates.
Table 15.Brazil: General Government 1/
19941995199619971998
Nonfinancial revenue28.829.626.126.728.6
Tax revenue26.426.023.823.924.5
Direct taxes3.84.24.03.94.8
Value-added taxes8.99.29.18.78.4
Social security taxes5.34.95.25.15.1
Trade taxes0.50.70.50.60.7
Other tax revenue8.06.94.95.65.4
Nontax revenue2.43.62.42.84.1
Nonfinancial expenditure25.329.226.327.728.2
Current expenditure24.026.725.325.525.8
Wages and salaries11.012.211.210.911.2
Transfers5.36.26.36.47.0
Pension benefits4.74.95.35.46.0
Subsidies and grants0.61.21.01.01.1
Other current expenditures7.78.37.88.27.6
Capital expenditure2.92.71.92.22.6
Float and statistical adjustment-1.6-0.2-0.90.0-0.2
Primary balance (deficit -)3.50.4-0.2-1.00.4
Real net interest payments 2/2.94.33.33.07.4
Operational balance (deficit -)0.6-3.9-3.4-4.0-7.1
Public sector borrowing requirement35.85.85.35.67.5
Sources: Central Bank of Brazil; Ministry of Finance; and Fund staff estimates.
Table 16.Brazil: Central Government Operations 1/(In percent of GDP)
19941995199619971998
Revenue 2/18.619.217.818.620.4
Taxes17.917.016.717.318.0
Direct3.84.24.03.94.8
Individual2.62.82.32.43.3
Corporate1.21.51.71.51.5
Indirect3.82.52.33.23.0
IPI2.12.02.01.91.8
IOF0.80.50.40.40.4
IPMF/CPMF1.00.00.00.80.9
Taxes on trade0.50.70.50.60.7
Earmarked social taxes4.14.14.14.03.8
Social security contributions5.34.95.25.15.1
Other taxes0.40.40.50.50.6
Nontax revenues0.72.21.21.32.4
Expenditure15.618.617.518.919.7
Current expenditure15.918.617.618.018.9
Wages and salaries5.15.25.04.95.1
Social security benefits4.74.9535.46.0
Transfers3.94.23.73.84.1
States and Municipalities transfers.3.43.23.03.13.4
Regional funds0.20.30.20.20.2
Public enterprises0.00.00.00.00.0
BNDES, regional funds0.30.60.60.50.6
Subsidies and grants0.10.30.30.40.3
Other current expenditure2.14.03.33.53.4
Capital expenditure1.00.80.80.91.1
Direct1.00.80.80.91.1
Capital transfers to public enterprises0.00.00.00.00.0
Float and adjustment-1.3-0.7-0.90.0-0.2
Of which:
FAT adjustment-0.4-0.55-0.4-0.2-0.2
Float-0.9-0.18-0.60.20.0
Primary balance (deficit -)3.00.60.4-0.30.6
Net interest payments 3/1.52.22.01.45.8
Operational balance (deficit -)1.6-1.6-1.6-1.7-5.2
Nominal balance (deficit -)-16.8-2.3-2.6-2.6-5.5
Sources: Central Bank of Brazil; ministry of finance; and Fund staff estimates.
Table 17.Brazil: State and Municipal Governments(In percent of GDP)
19941995199619971998
Revenue13.613.613.012.913.2
Tax revenue8.59.09.39.29.3
VAT and nonsales tax6.87.27.57.47.5
Other1.71.81.81.81.8
Nontax revenue1.71.40.50.50.5
Transfers3.43.23.33.33.5
Expenditure13.113.813.613.613.4
Current expenditure11.511.412.111.912.0
Wages and salaries5.97.07.47.37.3
Materials and supplies2.32.12.32.22.3
Other current expenditure3.42.32.42.42.4
Capital expenditure1.91.91.61.81.5
Float and adjustment-0.30.60.00.00.0
Primary Balance (deficit -)0.5-0.2-0.6-0.7-0.2
Net real interest payments 1/1.42.11.31.51.6
Operational balance (deficit -)-1.0-2.3-1.9-2.2-1.8
Nominal balance (deficit -)-19.0-3.5-2.7-3.0-2.0
Sources: Central Bank of Brazil; Ministry of Finance; and Fund staff estimates.
Table 18.Brazil: Nonfinancial Public Sector Enterprises(In percent of GDP)
1994199519961997Est.

1998
I. Federal Enterprises
Revenue9.97.99.08.87.9
Sales of goods and services8.77.07.87.67.0
Transfer receipts0.00.00.00.00.0
Current0.00.00.00.00.0
Capital0.00.00.00.00.0
Other1.30.91.21.20.9
Expenditure8.27.58.38.58.2
Current expenditure7.26.06.56.15.9
Wages and salaries1.71.41.41.10.9
Materials and supplies2.01.51.91.41.3
Services0.90.80.80.70.7
Taxes2.21.82.02.22.3
Other0.50.50.40.60.7
Capital expenditure1.71.52.02.01.7
Investment1.61.31.61.61.3
Other0.10.20.40.40.4
Float-0.80.0-0.20.40.6
Primary (deficit -)1.80.40.70.3-0.3
II. Local Enterprises
Primary (deficit-) 1/-0.9-0.5-0.6-0.20.0
III. Total
Primary (deficit -)0.8-0.10.10.1-0.3
Net interest payments 2/0.90.80.40.40.2
Operational (deficit -)-0.1-0.8-0.3-0.3-0.5
Nominal balance (deficit -)-8.4-1.3-0.6-0.5-0.5
Sources: Central Bank; Ministry of Finance; Ministry of Planning and Budget; and Fund staff, estimates.
Table 19.Brazil: Federal Treasury Cash Operations
19941995199619971998
(In millions of reais)
Cash revenue48,18086,29497,132116,033139,052
Cash expenditures 1/46,81090,256106,257121,675148,333
Earmarked12,53424,58627,18732,19138,463
Of which:
State and local government participation funds 29,05318,32020,83023,40627,011
Non-earmarked32,30762,22776,70786,963107,478
Wages17,93535,49740,50542,84947,298
Interest 3/5,46611,73915,99217,97327,713
Other8,90614,99120,21626,14132,467
Net lending1,9693,4432,2882,5212,393
Cash surplus or deficit (-)1,370-3,962-9,125-5,642-9,282
(As a percent of revenue)
Cash expenditures 1/97.2104.6109.4104.9106.7
Earmarked26.028.528.027.727.7
Of which:
State and local government participation funds 2/18.821.221.420.219.4
Non-earmarked67.172.179.074.977.3
Wages37.241.141.736.934.0
Interest 3/11.313.616.515.519.9
Other18.517.420.822.523.3
Net lending4.14.02.42.21.7
(As percent of GDP)
Cash revenue13.813.412.513.415.4
Cash expenditures 1/13.414.013.614.016.5
Earmarked3.63.83.53.74.3
Of which:
State and local government participation of funds2.62.82.72.73.0
Non-earmarked9.39.69.810.011.9
Wages5.15.55.24.95.2
Interest 3/1.61.82.12.13.1
Other2.62.32.63.03.6
Net lending0.60.50.30.30.3
Cash surplus or deficit (-)0.4-0.6-1.2-0.7-1.0
Memorandum item:
GDP (R$ million)349,205646,192778,820866,827901,406
Sources: Ministry of Finance; and Fund staff estimates.
Table 20.Brazil: Net Domestic Debt of the Public Sector 1/(In percent of GDP, end-of-period stocks)
19941995199619971998
Total20.724.929.430.236.0
By instrument
Securities16.221.427.832.737.8
Bank debt3.44.84.90.61.4
Other (net)1.1-1.3-3.3-3.1-3.2
By debtors
Federal government 2/6.49.814.316.821.1
Securities 3/11.515.621.428.235.4
Other-5.1-5.8-7.1-11.4-14.3
States and municipalities9.410.311.212.513.7
Securities4.75.86.44.52.4
Other4.74.54.88.011.3
Public enterprises5.04.93.90.91.3
Source: Central Bank of Brazil.
Table 21.Brazil: Federal Government Bonded Debt Outstanding (End-of-Period) 1/
December

1994
December

1995
December

1996
December

1997
December

1998
May

1999
(In millions of reais, end-of-period stocks)
Total by issuer126,742171,884232,502319,176483,073449,348
Issued by the treasury87,698108.560134,857247,614370,300357,728
Held by the central bank35,55232,66825,46038,898134,27176,372
Held by the public52,14675,893109,396208,716236,029281,356
Issued by the central bank39,04463,32497,64571,562112,77391,620
Total held by the public91,190139,217207,042280,278348,802372,975
Nonindexed instruments36,66359,441126,298114,66012,26019,127
Indexed instruments54,52779,77680,744165,618336,542353,848
Indexed to the overnight interest rate14,61752,58738,52697,490240,858242,612
Indexed to the foreign exchange rate7,5637,35019,42543,04373,24492,517
Indexed to other indicators32,34719,83922,79325,08522,44118,718
(In percent of total federal government bonded debt)
Issued by the treasury69.263.258.077.676.779.6
Issued by the central bank30.836.842.022.423.320.4
Held by the central bank28.119.011.012.227.817.0
Held by the public71.981.089.087.872.283.0
(In percent of total federal government bonded debt held by the public)
Nonindexed instruments40.242.761.040.93.55.1
Indexed instruments59.857.339.059.196.594.9
Indexed to the overnight interest rate16.037.818.634.869.165.0
Indexed to the foreign exchange rate8.35.39.415.421.024.8
Indexed to other indicators35.514.311.09.06.45.0
(In percent of GDP)
Total36.326.629.936.853.6
Total held by the public26.121.526.632.338.7
Memorandum item:
Annual GDP349,205646,192778,820866,827901,406
Sources: Central Bank of Brazil; and Fund staff estimates.
Table 22.Brazil: Outstanding Domestic Bonded Debt of the State and Municipal Governments
Dec

1994
Dec

1995
Dec

1996
Dec

1997
Dec

1998
May

1999
(In millions of reais, end-of-period stocks)
Total outstanding36,77650,70560,76945,01424,79324,765
State governments 1/32,91344,13953,04936,06713,49413,393
Minas Gerais6,6508,83110,30811,97000
Rio de Janeiro4,5345,9756,9738,09910,20410,644
Rio Grande do Sul4,9246,5877,6888,93200
São Paulo14,09518,74021,999000
Others2,7094,0066,0807,0663,2902,749
Municipal governments3,8636,5657,7218,94711,29911,372
Rio de Janeiro1,1261,4951,5721,8192,2882,384
São Paulo 2/2,7375,0705,9006,8478,6608,620
Others00249281351368
(As a percent of total state and municipal government bonded debt)
State governments 1/89.587.187.380.154.454.1
Minas Gerais18.117.417.026.60.00.0
Rio de Janeiro12.311.811.518.041.243.0
Rio Grande do Sul13.413.012.719.80.00.0
São Paulo38.337.036.20.00.00.0
Others7.47.910.015.713.311.1
Municipal governments10.512.912.719.945.645.9
Rio de Janeiro3.12.92.64.09.29.6
São Paulo 2/7.410.09.715.234.934.8
Others0.00.00.40.61.41.5
(Percent of GDP)
Total outstanding10.57.87.85.22.8
State governments 1/9.46.86.84.21.5
Minas Gerais1.91.41.31.40.0
Rio de Janeiro1.30.90.90.91.1
Rio Grande do Sul1.41.01.01.00.0
São Paulo4.02.92.80.00.0
Others0.80.60.80.80.4
Municipal governments1.11.01.01.01.3
Rio de Janeiro0.30.20.20.20.3
São Paulo 2/0.80.80.80.81.0
Others0.00.00.00.00.0
Memorandum item:
GDP349,205646,192778,820866,827901,406
Source: Central Bank of Brazil.
Table 23.Brazil: Monetary Aggregates(In millions of reais, end-of-period)
Base

Money 1/
M1 1/FIT FRF-CP DER2/Savings and

Time Deposits 3/
M2 4/Public Sector

Securities 5/
M4 6/
1994Jan.5688481,73511,39013,9727,29521,267
Feb.7741,2282,48615,96119,67510,38930,064
Mar.1,0351,6583,43622,82127,91515,08543,000
Apr.1,5622,4884,81832,01039,31621,44560,761
May2,2843,6656,64749,52659,83731,73391,570
Jun.3,1776,45810,50969,27286,23947,541133,780
Jul7,5339,56711,84780,027101,44147,558148,999
Aug.9,41411,73112,24784,570108,54846,474155,022
Sept.12,78914,20112,55486,729113,48441,484154,968
Oct.12,99914,88512,78092,592120,25641,358161,614
Nov.13,25616,05512,66796,892125,61440,234165,848
Dec.17,68520,62112,791100,001133,41336,975170,388
1995Jan.16,73716,20215,780110,282142,26334,413176,676
Feb.15,82118,02516,480112,856147,36135,545182,906
Mar.15,58215,28516,556116,855148,69634,394183,090
Apr.13,82815,31516,437118,471150,22335,302185,525
May13,81214,36416,635120,106151,10536,709187,814
Jun.13,94315,62616,900122,594155,12039,407194,527
Jul.15,03415,94917,660126,824160,43346,238206,671
Aug.15,61416,08518,456130,757165,29852,657217,955
Sept.13,45416,90015,047134,176166,12357,720223,843
Oct.15,35217,86711,573136,840166,28061,885228,165
Nov.15,55919,76813,549137,476170,79365,187235,980
Dec.21,68225,07413,200139,862178,13565,463243,598
1996Jan.22,43420,72514,958145,783181,46670,271251,737
Feb.17,00720,48715,785146,241182,51375,281257,794
Mar.16,18620,59416,071146,703183,36879,216262,584
Apr.15,00220,78616,543145,735183,06483,176266,240
May16,27220,44416,921144,775182,14090,371272,511
Jun.16,80721,02617,534145,497184,05793,075277,132
Jul.18,74820,86418,082144,137183,08399,274282,357
Aug.15,68721,12718,889143,741183,757101,996285,753
Sept,20,63822,61719,385145,978187,980104,308292,288
Oct.15,56520,91919,743149,676190,338107,359297,697
Nov.15,67622,02421,505151,749195,278111,312306,590
Dec.19,79626,41122,832152,305201,548114,048315,596
1997Jan.23,86030,11614,271148,027192,414126,076318,490
Feb.20,28533,02710,115148,239191,381131,818323,199
Mar.22,32434,0308,318150,236192,584135,443328,027
Apr.27,29133,2357,191150,280190,706140,830331,536
May21,74033,3506,567152,968192,885142,354335,239
Jun.24,68834,3316,015158,107198,453144,195342,648
Jul.24,21632,8455,595159,308197,748151,521349,269
Aug.21,86834,6855,412162,782202,879151,399354,278
Sept24,70035,8425,464168,165209,471154,875364,346
Oct.26,14736,3326,567174,393217,292154,141371,433
Nov.22,97236,5966,772180,767224,135148,754372,889
Dec.31,82843,0776,262183,721233,060148,807381,867
1998Jan.30,56439,1597,083189,703235,945150,805386,750
Feb.29,09138,8647,094191,567237,525157,236394,761
Mar.29,98538,288. 7,459193,623239,370167,472406,842
Apr.30,65538,5947,834193,555239,983171,356411,339
May31,09938,8268,157195,239242,222175,674417,896
Jun.37,22140,7027,840196,995245,537178,704424,241
Jul.32,98640,4477,997197,204245,648185,681431,329
Aug.35,41341,1208,109196,801246,030185,826431,856
Sept.32,00240,9527,735194,287242,974172,980415,954
Oct.32,82640,1857,389196,410243,984177,083421,067
Nov.39,73842,9947,768197,501248,263187,211435,474
Dec.39,18446,6317,441196,494250,566193,875444,441
1999Jan.39,63546,0987,462197,212250,772204,157454,929
Feb.37,85644,2657,326204,134255,725208,066463,791
Mar37,23242,2126,915208,209257,336213,163470,499
Apr36,35240,9616,537205,918253,416218,196471,612
May40,43540,9116,539206,786254,236224,000478,236
June33,178
Sources: Central Bank of Brazil; and Fund staff estimates.
Table 24.Brazil: Summary Accounts of the Financial System 1/(In millions of reais, end-of-period)
19941995199619971998
I. Central Bank
Net foreign assets33,21453,72868,21664,21751,516
Net international reserves31,60049,61462,27857,62845,374
Net other foreign assets1,6144,1145,9386,5896,142
Net domestic assets49,59750,24077,18776,360126,069
Net claims on public sector14,4128,4482,385-4,31178,600
Net central administration14,4128,4482,385-4,31178,600
Net state and local governments00000
Net social security00000
Net official enterprises00000
Credit to deposit money banks20,55634,57267,63968,01140,367
Credit to rest of banking system5539020
Credit to nonbanking institutions00671,926
Credit under repurchase agreements13,9083,22711,0510
Blocked financial assets-306-190-125-12-10
Credit to private sector35550
Nonmonetary international organizations4696398019621,125
Official capital and surplus-556-890-3,654-3,658-3,199
Net unclassified assets1,1064,42410,12613,4037,260
Counterpart unrequited foreign exchange1,366-890-3,654-3,658-2,034
Medium- and long-term foreign liabilities4,4494,4502,6372,4557,305
Mutual funds deposits2,5525,15411,6323,7264,545
Liabilities to deposit money banks24,37722,37022,27543,54933,438
Liabilities to rest of banking system2113823791,21121
Liabilities to nonbanking institutions9623142
Central bank securities outstanding39,28952,45783,10665,724104,709
Liabilities under repurchase agreements4,5015,7416,3682,1044,290
Liabilities to private sector8,70212,52215,32118,14621,241
Currency in circulation8,69712,51515,31418,13921,233
Other liabilities57778
II. Deposit Money Banks
Net foreign assets-3,610-10,050-16,311-16,729-10,690
Assets17,60218,15921,13021,81021,230
Liabilities21,21228,20937,44138,53931,920
Monetary reserves and currency holdings22,95622,12622,03542,49432,324
Other claims on monetary authorities5,1926,57818,93211,60337,542
Net domestic assets178,221241,287285,321321,075318,587
Net claims on public sector25,11425,04684,356115,19192,502
Net central administration-6,7697,76422,57483,85265,215
Net state and local governments25,68717,96753,23936,41916,569
Net social security-3,669-6,316-9,424-9,730-1,087
Net official enterprises9,8655,63117,9674,65011,805
Credit to rest of banking system8737701,0783,3533,282
Blocked financial assets00000
Credit to private sector158,826199,138204,681225,197255,736
Official capital and surplus-18,824-21,478-33,069-50,966-58,966
Net unclassified assets12,23237,81128,27528,30026,033
Medium- and long-term foreign liabilities9,82313,09515,97622,54729,030
Liabilities to monetary authorities20,45523,40739,02530,27211,234
Liabilities to rest of banking system11,9149,39622,01721,97324,546
Liabilities to private sector160,475213,932232,899283,417312,796
Demand deposits11,80811,25510,871.24,13224,903
Quasi-monetary liabilities119,979159,901173,714203,992222,404
Savings deposits42,53758,56268,85690,804101,482
Time deposits55,39178,43878,84884,23688,086
Other deposits22,05122,90126,01028,95232,836
Other liabilities3,4186,5507,25610,2838,863
Private capital and surplus25,27036,22641,05845,01056,626
III. Monetary System
Net foreign assets29,60443,67851,90547,48840,826
Assets51,71172,36589,48986,19480,435
Liabilities22,10728,68737,58438,70639,609
Net domestic assets167,344216,256252,701309,883360,851
Net claims on public sector39,52633,49486,741110,880171,102
Net central administration7,64316,21224,95979,541143,815
Net state and local governments25,68717,96753,23936,41916,569
Net social security-3,669-6,316-9,424-9,730-1,087
Net official enterprises9,8655,63117,9674,65011,805
Credit to rest of banking system8787751,0814,2553,282
Credit to nonbanking institutions00671,926
Blocked financial assets-306-190-125-12-10
Credit to private sector158,829199,143204,686225,202255,736
Nonmonetary international organizations4696398019621,125
Official capital and surplus-19,380-22,368-36,723-54,624-62,165
Net unclassified assets-16,544-12,736-51,072-25,074-75,706
Net interbank float3,87217,49947,30648,28765,561
Counterpart unrequited foreign exchange1,366-890-3,654-3,658-2,034
Medium- and long-term foreign liabilities14,27217,54518,61325,00236,335
Mutual funds deposits2,5525,15411,6323,7264,545
Liabilities to rest of banking system12,1259,77822,39623,18424,567
Liabilities to nonbanking institutions18811391238159
Liabilities to private sector169,177226,454248,220301,563334,037
Monetary liabilities20,50523,77026,18542,27146,136
Currency in circulation8,69712,51515,31418,13921,233
Demand deposits11,80811,25510,87124,13224,903
Quasi-monetary liabilities119,979159,901173,714203,992222,404
Savings deposits42,53758,56268,85690,804101,482
Time deposits55,39178,43878,84884,23688,086
Other deposits22,05122,90126,01028,95232,836
Other liabilities3,4236,5577,26310,2908,871
Private capital and surplus25,27036,22641,05845,01056,626
IV. Rest of Banking System
Net foreign assets1,030339-515-391-310
Assets1,26938218415988
Liabilities23943699550398
Monetary reserves and currency holdings1,5266117681,174880
Other claims on monetary authorities1134591,1953,015733
Net domestic assets12,68913,23216,03319,69424,573
Net claims on public sector-6,284-6,372-8,256-7,432-5,703
Net central administration-9,907-10,675-12,963-12,643-11,362
Net state and local governments9189311,1602,4002,461
Net social security00000
Net official enterprises2,7053,3723,5472,8113,198
Credit to deposit money banks11,50615,62419,43822,74926,982
Blocked financial assets00000
Credit to private sector25,79627,33231,80241,44051,369
Official capital and surplus-12,816-16,461-12,624-14,397-14,241
Net unclassified assets-5,513-6,891-14,327-22,666-33,834
Medium- and long-term foreign liabilities1,6382,1412,6364,35610,964
Liabilities to monetary authorities7781,0351,0652,020354
Liabilities to deposit money banks9581,1621,1523,8041,235
Liabilities to private sector11,98410,30312,62813,31213,323
Demand deposits00000
Quasi-monetary liabilities7,8655,2986,3397,2817,503
Savings deposits2,4663,3053,8075,2085,542
Time deposits5,0361,6922,2281,8241,432
Other deposits363301304249529
Other liabilities179143563.497357
Private capital and surplus3,9404,8625,7265,5345,463
V. Banking System
Net foreign assets30,63444,01751,39047,09740,516
Assets52,98072,74789,67386,35380,523
Liabilities22,34628,73038,28339,25640,007
Net domestic assets167,811218,583246,084304,758360,881
Net claims on public sector33,24227,12278,485103,448165,399
Net central administration-2,2645,53711,99666,898132,453
Net state and local governments26,60518,89854,39938,81919,030
Net social security-3,669-6,316-9,424-9,730-1,087
Net official enterprises12,5709,00321,5147,46115,003
Credit to nonbanking institutions00671,926
Blocked financial assets-306-190-125-12-10
Credit to private sector184,625226,475236,488266,642307,105
Nonmonetary international organizations4696398019621,125
Official capital and surplus-32,196-38,829^9,347-69,021-76,406
Net unclassified assets-22,057-19,627-65,399-47,740-109,540
Net interbank float4,03422,99345,17550,47271,282
Counterpart unrequited foreign exchange1,366-890-3,654-3,658-2,034
Medium- and long-term foreign liabilities15,91019,68621,24929,35847,299
Mutual funds deposits2,5525,15411,6323,7264,545
Liabilities to nonbanking institutions18811391238159
Liabilities to private sector181,161236,757260,848314,875347,360
Monetary liabilities20,50523,77026,18542,27146,136
Currency in circulation8,69712,51515,31418,13921,233
Demand deposits11,80811,25510,87124,13224,903
Quasi-monetary liabilities127,844165,199180,053211,273229,907
Savings deposits45,00361,86772,66396,012107,024
Time deposits60,42780,13081,07686,06089,518
Other deposits22,41423,20226,31429,20133,365
Other liabilities3,6026,7007,82610,7879,228
Private capital and surplus29,21041,08846,78450,54462,089
VI. Nonbank Financial Institutions
Net foreign assets768771-131-138
Assets7687934544
Liabilities0022176182
Monetary reserves and currency holdings3631142
Other claims on monetary authorities405154350364656
Net domestic assets9,51016,34922,52026,89230,982
Net claims on public sector4133801,5111,3441,235
Net central administration17421,0891,2271,156
Net state and local governments36033040810368
Net social security00000
Net official enterprises368141411
Credit to deposit money banks1,4051,7093,0622,8104,063
Credit to rest of banking system145123520
Blocked financial assets00000
Credit to private sector2,0742,4583,5993,6013,561
Official capital and surplus00000
Net unclassified assets5,60411,79714,33619,10222,103
Medium- and long-term foreign liabilities1,5292,2932,9723,5524,041
Liabilities to monetary authorities00000
Liabilities to deposit money banks00000
Liabilities to rest of banking system1,5171,6193,6704,0935,176
Liabilities to private sector6,94812,68416,33019,49422,285
Demand deposits00000
Quasi-monetary liabilities00000
Savings deposits00000
Time deposits00000
Other deposits00000
Other liabilities1,1813,9015,4828,3079,243
Private capital and surplus5,7678,78310,84811,18713,042
VII. Financial System
Net foreign assets30,71044,10451,46146,96640,378
Assets53,05672,83489,76686,39880,567
Liabilities22,34628,73038,30539,43240,189
Net domestic assets176,024233,360265,224327,697387,186
Net claims on public sector33,65527,50279,996104,792166,634
Net central administration-2,2475,57913,08568,125133,609
Net state and local governments26,96519,22854,80738,92219,098
Net social security-3,669-6,316-9,424-9,730-1,087
Net official enterprises12,6069,01121,5287,47515,014
Blocked financial assets-306-190-125-12-10
Credit to private sector186,699228,933240,087270,243310,666
Nonmonetary international organizations4696398019621,125
Official capital and surplus-32,196-38,829-49,347-69,021-76,406
Net unclassified assets-16,453-7,830-51,063-28,638-87,437
Net interbank float4,15623,13544,87549,37172,614
Counterpart unrequited foreign exchange1,366-890-3,654-3,658-2,034
Medium- and long-term foreign liabilities17,43921,97924,22132,91051,340
Mutual funds deposits2,5525,15411,6323,7264,545
Liabilities to private sector188,109249,441277,178334,369369,645
Monetary liabilities- 20,50523,77026,18542,27146,136
Currency in circulation8,69712,51515,31418,13921,233
Demand deposits11,80811,25510,87124,13224,903
Quasi-monetary liabilities127,844165,199180,053211,273229,907
Savings deposits45,00361,86772,66396,012107,024
Time deposits60,42780,13081,07686,06089,518
Other deposits22,41423,20226,31429,20133,365
Other liabilities4,78310,60113,30819,09418,471
Private capital and surplus34,97749,87157,63261,73175,131
Sources: Central Bank of Brazil; and Fund staff estimates.
Table 25.Brazil: Financial System Loans 1/
19941995199619971998April

1999
(In millions of reais, end of period)
Total loans outstanding187,495244,543260,709265,744281,425283,216
Unimpaired loans182,280221,982243,734247,176254,771258,138
Impaired loans5,21522,56116,97518,56826,65425,078
In arrears 2/4,5175,5503,9223,4786,7094,580
Under liquidation 2/69817,01113,05315,09019,94520,498
Provisions4,73322,39519,84326,54332,09733,360
Total loans outstanding187,495244,543260,709265,744281,425283,216
Lent to government sector 3/46,72554,04563,61736,78133,34734,162
Lent to nongovernment sector140,770190,498197,092228,963248,078249,054
Unimpaired loans182,280221,982243,734247,176254,771258,138
Lent to government sector41,62750,91861,40837,30233,07233,762
Lent to nongovernment sector140,653171,064182,326209,874221,699224,376
Industry34,94745,48950,22056,62759,87266,496
Housing40,95751,48551,62555,95760,88161,704
Rural sector14,70021,35918,22022,00920,64521,859
Commerce16,86720,14521,24221,74118,08618,599
Consumer loans13,70512,07719,55829,74930,19429,240
Other services19,47720,50921,46123,79132,02126,478
(In percent of total loans outstanding)
Unimpaired loans97.290.893.593.090.591.1
Impaired loans2.89.26.57.09.58.9
Provisions as percent of total impaired loans90.899.3116.9143.0120.4133.0
Lent to public sector 3/24.922.124.413.811.812.1
Lent to private sector75.177.975.686.288.287.9
Unimpaired loans97.290.893.593.090.591.1
Lent to government sector22.220.823.614.011.811.9
Lent to nongovernment sector75.070.069.979.078.879.2
Industry18.618.619.321.321.323.5
Housing21.821.119.821.121.621.8
Rural sector7.88.77.08.37.37.7
Commerce9.08.28.18.26.46.6
Consumer loans7.34.97.511.210.710.3
Other services10.48.48.29.011.49.3
Sources: Central Bank of Brazil; and Fund staff estimates.
Table 26.Brazil: Monthly Rates of Return on Selected Financial Instruments(In percent)
Nominal interest ratesReal rates 1/
OvernightTime

deposits
Savings

deposits
OvernightTime

deposits
Savings

deposits
1990average25.425.926.6-2.3-1.9-1.4
1991average17.018.415.60.92.1-0.3
1992average26.326.224.12.32.20.5
1993average33.433.331.81.00.9-0.2
1994average25.226.024.01.82.50.8
Jan42.846.842.10.43.30.0
Feb42.043.940.6-0.31.1-1.3
Mar46.444.942.61.10.1-1.6
Apr46.549.546.72.84.93.0
May48.048.447.25.05.34.4
Jun50.653.747.62.84.90.7
Jul6.95.25.61.3-0.30.1
Aug4.23.62.60.80.2-0.7
Sep3.84.03.02.22.41.4
Oct3.63.93.11.01.30.5
Nov4.14.33.41.61.80.9
Dec3.83.53.43.22.92.8
1995average3.63.52.82.42.41.7
Jan3.43.62.62.02.21.2
Feb3.33.12.42.12.01.2
Mar4.34.62.82.42.71.0
Apr4.34.34.01.92.01.6
May4.24.13.83.83.73.3
Jun4.04.13.41.41.40.8
Jul4.03.93.51.71.71.2
Aug3.83.53.12.52.21.8
Sep3.33.12.44.54.23.6
Oct3.12.92.22.92.61.9
Nov2.92.91.91.51.50.6
Dec2.82.51.82.52.31.6
1996average2.02.01.31.31.20.5
Jan2.62.61.80.80.70.0
Feb2.42.31.51.61.50.7
Mar2.22.11.32.01.91.1
Apr2.12.01.21.41.20.5
May2.02.01.10.30.3-0.6
Jun2.01.91.10.70.7-0.1
Jul1.91.81.10.80.70.0
Aug2.01.91.12.01.91.1
Sep1.91.81.21.81.71.0
Oct1.91.81.21.61.61.0
Nov1.81.81.31.51.51.0
Dec1.81.61.40.90.70.5
1997average1.91.81.31.31.20.7
Jan1.71.71.20.10.2-0.3
Feb1.71.91.21.21.40.7
Mar1.61.61.10.50.40.0
Apr1.71.61.11.11.00.5
May1.61.61.11.31.30.8
Jun1.61.61.20.90.90.5
Jul1.61.61.21.51.51.1
Aug1.61.61.11.61.71.2
Sep1.61.61.21.01.00.6
Oct1.71.71.21.31.30.8
Nov3.02.92.02.22.01.2
Dec3.02.61.82.31.91.1
1998average2.12.01.12.01.91.0
Jan2.72.71.71.81.80.8
Feb2.12.00.92.12.00.9
Mar2.22.11.42.01.91.2
Apr1.71.61.01.81.71.1
May1.61.61.01.41.40.7
Jun1.61.61.01.31.40.7
Jul1.71.71.12.12.11.4
Aug1.51.50.91.61.71.0
Sep2.52.31.02.52.31.0
Oct2.92.71.43.02.81.4
Nov2.62.21.12.82.41.3
Dec2.42.31.21.41.30.3
1999average2.52.41.31.01.0-0.1
Jan2.22.41.01.01.3-0.1
Feb2.42.61.3-2.0-1.7-3.0
Mar3.33.21.71.31.2-0.3
Apr2.42.11.32.32.01.3
May2.01.81.32.42.21.6
Sources: Central Bank of Brazil; and Fund staff estimates.
Table 27.Brazil: Total Loans by Sector 1/(In percent of total loans)
Public SectorPrivate Sector
Federal

government
States and

municipalities
SubtotalIndustryMortgageAgricultureCommerceIndividualOther servicesSubtotalTotal
1993Dec4.216.620.830.820.77.57.03.110.079.2100.0
1994Dec4.417.321.820.821.18.79.47.111.178.2100.0
1995Dec3.115.718.723.119.59.810.75.512.781.3100.0
1996Dec1.921.823.622.718.28.18.04.415.076.4100.0
1997Jan1.821.022.823.017.78.08.34.615.577.2100.0
Feb1.720.622.323.317.17.98.54.816.177.7100.0
Mar1.620.021.623.417.17.88.74.816.578.4100.0
Apr1.519.721.223.616.57.79.04.917.178.8100.0
May1.219.220.424.116.07.49.45.017.979.6100.0
Jun1.119.420.524.215.37.09.64.918.579.5100.0
Jul1.018.919.924.514.86.89.94.919.180.1100.0
Aug1.018.319.324.914.26.710.24.919.780.7100.0
Sep0.917.818.725.213.56.610.54.920.481.3100.0
Oct1.017.018.025.612.76.710.94.921.182.0100.0
Nov0.916.517.425.912.06.511.44.821.982.6100.0
Dec0.98.69.528.313.15.912.35.225.890.5100.0
1998Jan0.98.08.928.612.35.713.05.126.591.1100.0
Feb0.87.78.528.811.65.513.45.227.091.5100.0
Mar0.87.28.028.910.95.313.85.427.792.0100.0
Apr0.76.97.529.110.25.114.45.428.392.5100.0
May0.76.57.229.29.54.914.85.529.092.8100.0
Jun0.76.16.729.49.04.615.35.429.693.3100.0
Jul0.65.66.229.78.54.315.95.430.193.8100.0
Aug0.64.85.429.88.04.116.55.530.794.6100.0
Sep0.96.97.928.712.05.95.16.034.592.1100.0
Oct0.96.57.429.311.45.65.16.035.392.6100.0
Nov0.85.76.629.210.75.35.05.937.493.4100.0
Dec0.85.26.129.610.15.14.85.638.793.9100.0
1999Jan0.85.16.031.49.95.14.95.836.994.0100.0
Feb1.69.911.527.018.99.97.915.69.488.5100.0
Mar1.69.611.226.5. 18.69.88.110.015.888.8100.0
Apr1.69.511.126.118.49.98.210.515.888.9100.0
Source: Central Bank of Brazil.
Table 28.Brazil: Exports by Principal Commodity Groups
19941995199619971998
(In millions of U.S. dollars)
Total exports43,54546,50647,74752,98651,120
Primary products11,05810,96911,90014,47412,970
Coffee beans2,2191,9701,7192,7452,330
Raw sugar 1/173408000
Soybeans and soybran3,2962,7673,7495,1333,925
Cocoa beans108254789
Tobacco leaf6947691,0291,091940
Iron ore2,2942,5482,6952,8463,251
Other2,2742,4822,6612,6512,515
Industrial products31,85234,71135,02637,66837,494
Semi-manufactures6,8939,1468,6138,4788,112
Raw sugar 1/6151,0421,1911,0451,095
Cocoa products17392115108131
Tin8857676235
Soybean oil8281,031685532720
Paper paste8401,447954958993
Iron products734838871876887
Steel products1,0721,3691,2941,3591,217
Leather hides459566678739665
Other2,0842,7042,7582,7992,369
Manufactures24,95925,56526,41329,19029,382
Soluble coffee340456376349246
Refined sugar195366421726846
Electric machinery1,3951,5031,5841,7831,712
Nonelectric machinery3,6603,9044,1804,5314,338
Transport equipment3,7273,2113,7215,6206,457
Of which:
Total automobiles1,4041,0401,2472,4882,829
Airplanes1401822846811,159
Footwear1,6241,4991,6501,5941,387
Fruit juices1,0191,1321,4531,0581,306
Steel products2,6782,4712,6222,7142,596
Processed beef300302243239314
Cotton fabrics and yarn291299278246224
Other textiles1,1121,1421,0141,021889
Petroleum derivatives1,139839949988865
Other7,4798,4417,9228,3218,202
Other exports635826821844656
(Annual percentage change)
Memorandum Hens:
Total exports12.96.82.711.0-3.5
Primary products18.1-0.88.521.6-10.4
Semi-manufactures26.632.7-5.8-1.6-4.3
Manufactures6.52.43.310.50.7
Excl. automobiles and airplanes5.34.02.24.6-2.4
Total automobiles28.7-25.919.999.513.7
Source: Secex-MICT.
Table 29.Brazil: Imports by End-Use
19941995199619971998
(In millions of U.S. dollars)
Total Imports, f.o.b.33,07949,97253,30159,83857,711
Consumer goods5,54010,9279,72111,01110,702
Foodstuffs2,0143,5143,2793,2903,057
Apparel296804862979791
Automobiles1,4693,0401,5622,6412,796
Others1,7613,5694,0184,1014,058
Raw materials15,60722,38224,64627,13226,811
Grains1,4081,6652,1031,5831,865
Of which:
Wheat7499141,288822814
Fertilizers6346618601,021954
Chemical products4,9617,3497,9588,9269,263
Inorganic chemical products495639566553543
Organic chemical products2,2022,9903,1793,4883,446
Other chemical products2,2633,7204,2144,8845,273
Cast iron and steel4326997931,2541,375
Nonferrous metals5711,0969381,1271,091
Coal677764755807774
Others6,92410,14811,23912,41411,489
Fuels and lubricants4,3565,2176,2285,5974,110
Crude oil2,3392,5873,4593,2201,967
Refined products2,0172,6302,7692,3772,143
Capital goods7,57611,44612,70616,09816,088
Transport equipment and components1,9273,0012,9483,7413,996
Automotive vehicles, tractors etc.1,6972,5392,4172,7232,869
Others2304625311,0181,127
Machines and electric materials5,6498,4459,75812,35712,092
(In percent)
Total imports100.0100.0100.0100.0100.0
Consumer goods16.721.918.218.418.5
Automobiles4.46.12.94.44.8
Other12.315.815.314.013.7
Raw materials47.244.846.245.346.5
Fuels and lubricants13.210.411.79.47.1
Capital goods22.922.923.826.927.9
Transport equipment and components5.86.05.56.36.9
Machines and electric materials17.116.918.320.721.0
(Annual percentage change)
Total imports31.051.16.712.3-3.6
Consumer goods72.697.2-11.013.3-2.8
Automobiles109.9106.9-48.669.15.9
Other62.293.73.42.6-5.5
Raw materials21.343.410.110.1-1.2
Fuels and lubricants6.419.819.4-10.1-26.6
Capital goods48.951.111.026.7-0.1
Transport equipment and components37.355.7-1.826.96.8
Machines and electric materials53.349.515.526.6-2.1
Source: Secex - MICT.
Table 30.Brazil: International Reserves of the Central Bank 1/(In millions of U.S. dollars)
199319941995199619971998End

Feb

1999
End

May

1999
Net reserves24,94837,43851,04259,95151,65534,60025,67424,742
Gross reserves31,71138,48751,53360,08951,72943,97134,96643,687
Gold1,1071,4181,7671,3819031,3531,3041,130
SDRs27111403423
Foreign exchange30,60237,06249,76558,70750,82542,57833,62842,534
Liabilities6,7631,049491138749,3719,29218,945
Use of Fund credit30418614168314,8024,6609,469
Arrears6,44979628600000
Others liabilities10676470434,5694,6329,476
Source: Central Bank of Brazil.
Table 31.Brazil: Detailed Balance of Payments(In millions of U.S. dollars)
19941995199619971998
Current account balance-1.69-18.09-23.14-30.92-33.61
As a percentage of GDP-0.31-2.56-2.98-3.84-4.33
Trade balance (f.o.b.)10.47-3.47-5.55-6.85-6.59
Exports43.5546.5147.7552.9951.12
Imports-33.08-49.97-53.30-59.84-57.71
Services and transfers-12.15-14.62-17.58-24.07-27.02
Services (net)-14.74-18.59-20.48-26.28-28.80
Interest payments-6.34-8.16-9.17-10.39-11.95
Revenues1.802.493.594.023.89
Expenditures-8.14-10.64-12.76-14.41-15.84
Other services-8.41-10.44-11.31-15.89-16.85
Revenues4.866.226.797.879.33
Expenditures-13.27-16.66-18.10-23.76-26.18
International travel-1.18-2.42-3.60-4.38-4.15
Revenues1.050.970.841.071.59
Expenditures-2.23-3.39-4.44-5.45-5.73
Transports-2.44-3.01-2.75-3.51-3.26
Revenues1.701.721.431.411.87
Expenditures-4.14-4.73-4.19-4.92-5.12
Insurance-0.13-0.12-0.060.070.08
Revenues0.140.190.240.410.39
Expenditures-0.27-0.31-0.30-0.34-0.31
Profits and dividends-2.57-2.97-2.90-5.75-7.30
Revenues0.400.911.470.910.49
Expenditures (inludes reinvestments)-2.97-3.88-4.37-6.66-7.79
Government-0.33-0.34-0.30-0.35-0.39
Revenues0.090.130.200.500.55
Expenditures-0.42-0.47-0.51-0.85-0.93
Other-1.76-1.57-1.69-1.98-1.84
Revenues1.472.312.613.574.45
Expenditures-3.23-3.88-4,29-5.55-6.29
Unrequited transfers2.593.972.902.221.78
Credits2.754.233.172.542.22
Debits-0.16-0.25-0.27-0.33-0.44
Capital account balance14.6331.5732.1523.0716.33
Investment (net)8.215.0516.0720.8120.88
Abroad by brazilians (net)-1.04-1.560.06-1.57-3.40
In Brazil by nonresidents9.256.6116.0222.3824.28
Debt conversion0.140.310.290.662.17
FDI1.743.619.1216.2223,74
Credit2.364.789.6417.8826.35
Debit-0.62-1.16-0.52-1.66-2.61
Portfolio investments7.282.296.045.30-1.85
Credit25.1424.8426.0839.5531.83
Debit-17.86-22,54-20.04-34.25-33.68
Reinvested profits0.080.380.530.150.12
Other0.010.010.030.050.10
Long-term capital4.426.5512.7318.5626.48
Multilateral-0.67-0.131.171.632.71
Disbursement1.131.652.883.154.17
Amortization-1.80-1.78-1.71-1.52-1.46
Bilateral-0.69-1.64-2.10-0.55-0.92
Inflow0.310.400.391.261.14
Amortization-1.00-2.04-2.49-1.81-2.06
Suppliers/buyers-0.55-0.43-1.0812.711.95
Disbursement0.951.451.2515.8418.10
Amortization-1.50-1.89-2.32-3.13-16.15
Banks-0.90-0.03-3.08-0.143.15
Disbursement2.031.430.562.435.75
Amortization-2.93-1.46-3.64-2.57-2.60
Intercompany0.180.731.222.575.78
Disbursement0.631.131.583.066.66
Amortization-0.45-0.40-0.35-0.49-0.88
Bonds and notes4.907.8815.444.1019.89
Disbursement7.1310.4118.5018.3426.37
Amortization-2.23-2.53-3.06-14.25-6.48
Other-0.460.531.110.54-1.07
Disbursement0,621.451.942.792.90
Amortization-1.09-0.92-0.84-2.25-3.96
Refinancing3.070.310.25-0.450.00
Brazilian lending abroad-0.45-0.68-0.21-1.84-5.02
Short-term capital (net)0.9118.835.75-17.53-27.29
Other (including errors & omissions)1.081.14-2.401.22-3.74
Overall balance12.9413.489.02-7.85-17.29
Gross reserves (- = increase)-7.22-12.92-8.677.917.97
Liabilities-5.72-0.56-0.35-0.069.31
IMF-0.12-0.04-0.07-0.044.76
Bilateral support0.000.000.000.004.54
Monetary authority and short-term liabilities-5.61-0.52-0.28-0.030.01
Source: Central Bank of Brazil.
Table 32.Brazil: Direction of Trade 1/
19941995199619971998
(In millions of U.S. dollars)
Total exports f.o.b.43,54546,50647,74752,98651,120
Latin America 2/10,16310,39911,32214,21013,873
MERCOSUL5,9216,1547,3069,0448,877
Argentina4,1364,0415,1706,7676,747
Paraguay1,0541,3011,3251,4061,249
Uruguay732812811870881
Other4,2424,2454,0165,1664,996
EU3/12,20212,91212,83614,51314,744
United States 4/8,9518,7989,3129,4079,865
Japan2,5743,1023,0473,0682,202
Oil exports 5/8471,0781,1421,2811,611
CMEA 6/5349851,0561,3131,163
Other8,2749,2329,0329,1947,662
Total imports f.o.b.33,07949,97253,30159,83857,711
Latin America 2/6,41110,03911,66113,17812,413
MERCOSUL4,5836,8318,2679,5179,427
Argentina3,6625,5816,7848,0328,033
Paraguay352514551518351
Uruguay5697379329671,042
Other1,8273,2083,3943,6612,986
EU 3/8,97213,75414,12015,87416,831
United States 4/6,78710,51311,86513,90213,688
Japan2,4123,2962,7613,5343,274
Oil exporters 5/2,5342,2482,6652,7752,132
CMEA 6/8101,044978838810
Other5,1539,0789,2529,7378,563
(In percent)
Total exports f.o.b.100.0100.0100.0100.0100.0
Latin America 2/23.322.423.726.827.1
MERCOSUL13.613.215.317.117.4
Argentina9.58.710.812.813.2
Paraguay2.42.82.82.72.4
Uruguay1.71.71.71.61.7
Other9.79.18.49.79.8
EC 3/28.027.826.927.428.8
United States 4/20.618.919.517.819.3
Japan5.96.76.45.84.3
Oil exporters 5/1.92.32.42.43.2
CMEA 6/1.22.12.22.52.3
Other19.019.918.917.415.0
Total imports f.o.b.100.0100.0100.0100.0100.0
Latin America 2/19.420.121.922.021.5
MERCOSUL13.913.715.515.916.3
Argentina11.111.212.713.413.9
Paraguay1.11.01.00.90.6
Uruguay1.71.51.71.61.8
Other5.56.46.46.15.2
EC 3/27.127.526.526.529.2
United States 4/20.521.022.323.223.7
Japan7.36.65.25.95.7
Oil exporters 5/7.74.55.04.63.7
CMEA 6/2.42.11.81.41.4
Other15.618.217.416.314.8
Source: Secex-MICT.
Table 33.Brazil: Total External Debt(In millions of U.S. dollars)
199319941995199619971998End-March

1999
Registered debt114,270119,668129,313144,092167,760210,458198,515
Public sector 1/83,51586,86487,16884,22976,205
Banks44,0166,2126,1385,6425,348
Brazilian6,7491,9121,967910954
Foreign37,2674,3004,1714,7324,394
Multilateral9,0148,8708,8378,8809,236
Bilateral (Paris Club included)19,22619,26418,48015,08912,518
Debt bond from banks8,36351,53851,45151,23941,930
Others2,8969802,2623,3797,173
Private sector30,75532,80442,14559,86391,555
Banks18,91022,00430,25246,67367,759
Brazilian2,6833,0133,8085,4488,863
Foreign16,22718,99126,44441,22558,896
Multilateral1,8521,7891,9842,5133,150
Bilateral6074137009161,996
Others9,3868,5989,2099,76118,650
Nonregistered debt31,45628,62729,94335,84332,23822,78019,207
Public sector 1/7,0984662877042280
Arrears6,44938628600
Banks6,379 -38628600
Others700000
Paris Club00000
Credit lines10000
Banco Central do Brasil6488017042
New money trade6000000
Others488017042280
Private sector24,35828,16129,65635,77332,19622,75219,207
Credit lines2,3772,5863,4215,1625,6954,2763,652
Commercial banks (liabilities)21,98125,57526,23530,61126,50118,47615,555
Total external debt145,726148,295159,256179,935199,998235,058219,478
Public sector 1/90,61387,33087,45584,29976,247
Private sector55,11360,96571,80195,636123,751
International reserves32,21138,80651,84060,11052,17343,97133,227
Commercial banks assets8,42415,0358,93011,6759,639
Net total external debt105,09194,45498,486108,150138,186
Memorandum items:
Total external debt (percent of exports of G&NFS)349.7316.9320.6353.0348.8418.7495.5
Total external debt (percent of GDP)33.226.622.323.224.930.043.1
Short-term debt (percent of gross international reserves)97.773.857.862.971.054.766.5
Foreign banks82,26848,94557,51078,10692,267
Registered53,49423,29130,61545,95763,290
Nonregistered28,77425,65426,89532,14928,977
Brazilian banks11,9947,8188,8229,98213,078
Registered9,4324,9255,7756,3589,817
Nonregistered2,5622,8933,0473,6243,261
Source: Central Bank of Brazil.

Prepared by S. Gupta, R. Gillingham, and L. De Mello.

This report draws upon the two recent World Bank reports on social protection and social spending in Brazil: Social Protection Special Sector Adjustment Loan, Report No. 7281, December 16, 1998; and Brazil—Fiscal Adjustment and Social Spending: “The Case of Education and Health in Four Brazilian States, “ Report No. BR–17763.

The World Bank is currently undertaking surveys to monitor the poverty impact of the crisis.

The poverty line is R$65 per capita income per month.

See Mercado de Trabalho: Balança de 1995, Ministry of Labor and IPEA, 1996, IPEA, Brasilia.

Poverty and income inequality have been found to be procyclical in Latin America. For instance, a 1 percent fall in per capita in GDP has a stronger impact on the incidence of poverty and inequality than a 1 percent increase in per capita GDP. This result is based on the analysis of 53 spells of growth and recession in 12 countries, including Brazil, during the period 1970–94. See A De Janvry and E. Sadoulet, Growth, Poverty, and Inequality in Latin America: A Causal Analysis, 1970–94, IDB Conference on Social Protection and Poverty, Washington, D.C, January 4, 1999.

For the federal government alone, social outlays have increased from 10.5 percent of GDP in 1997 to 11.1 percent of GDP in 1998. For 1999, federal social outlays are expected to reach 12.0 percent of GDP.

These benefits are being phased out because responsibility for this group has been shifted to the LOAS program, described below.

Workers with employment history of at least 16 months can apply for unemployment benefits. In the first year of unemployment, eligible beneficiaries receive between three to five compensation payments. Effective January 1, 1999, the government decided to provide three more compensation payments between 12 and 18 months of unemployment, taking the maximum number of compensation payments to 8.

Preliminary analysis carried out by the World Bank shows that only a small proportion of unemployment benefits is actually received by poor households.

Higher education spending has been shown to have a regressive impact on the poor. The two highest quintiles receive 63 percent of benefits from public spending on higher education, against 19 percent for the two lowest quintiles. See Poverty Assessment, World Bank, 14323–BR, 1995.

The budgetary allocation for unemployment benefit may turn out to be excessive, given the recent fall in unemployment rates. This suggests that actual spending on these programs may be different from that envisaged in the revised fiscal program.

Analysis using household survey data for the metropolitan region of São Paulo (Pesquisa de Condições de Vida, PCV) shows that private health and education outlays are concentrated in the highest income quintile. The lowest quintile accounts for 2.1 percent of total private spending on primary education, against 60.2 percent for the highest quintile. In the case of private health spending, the lowest quintile accounts for 10.8 percent of total outlays, against 41.7 percent in the highest quintile.

Bolsa Escola provides one minimum wage to parents if children are enrolled in primary schools. The child-labor eradication program transfers payments to families who take their children (7–14 years of age) out of the work place and enroll them in schools.

In the program, the monthly wage rate was set at R$65 for a three-day week. This is equivalent to the daily minimum wage rate of roughly R$5.5 (the statutory minimum wage was R$130 for a 5.5 day-week).

Argentina has also used workfare programs (Programa Trabajar) since 1995. Mexico’s Solidariedad is another successful example of income support in Latin America. Chile provided income support to 11 percent of its labor force in the mid-1980s. All three countries in Asia affected by the crisis in 1997 (Indonesia, Korea, and Thailand) have implemented these programs.

The World Bank is advising the Brazilian government on the implementation of a federal workfare program. One area of concern remains the wage level to be offered to those seeking employment under this program.

FAT currently has assets totaling R$35 billion, that yield below-market return. Part of these assets are held in short-term securities to finance unexpected increases in the demand for unemployment benefits. These short-term securities could provide financing for workfare programs in Brazil, subject to approval by FAT’s council (CONFAT).

The program was implemented in 1996, and is gradually replacing the Renda Mensal Vitalícia program, which is closed to new entrants. LOAS has stringent eligibility requirements: for both the elderly and disabled, per capita household income cannot exceed 25 percent of the minimum wage; the elderly must be at least 67 years old and disabilities must be certified by the Instituto Nacional de Seguridade Social (INSS), the agency that administers the RGPS.

The World Bank is assisting the authorities to improve the means testing of LOAS and other social assistance programs.

The World Bank and the Brazilian government are currently involved in technical work on possible World Bank support for the Programa de Garantia de Renda Minima.

By April 1999, 106 municipalities had agreed to participate in the program, benefiting 62,000 households and 127,000 children.

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