Brazil asks IMF to review way it calculates debt

BRASILIA/SAO PAULO Sun Jul 28, 2013 2:34am IST

Brazil's Finance Minister Guido Mantega gives a news conference in Brasilia, July 22, 2013. REUTERS/Fabio Rodrigues-Pozzebom

Brazil's Finance Minister Guido Mantega gives a news conference in Brasilia, July 22, 2013.

Credit: Reuters/Fabio Rodrigues-Pozzebom

Related Topics

BRASILIA/SAO PAULO (Reuters) - Brazil has asked the International Monetary Fund to review the way it measures the nation's gross debt, saying the methodology inflates the indicator, according to a letter the government sent to the multilateral institution.

In the letter to IMF Managing Director Christine Lagarde, Finance Minister Guido Mantega asked the fund to revise the calculation of gross debt, which is a sum of all government liabilities at the federal, regional and state-run company levels.

According to Mantega, the issue has been thoroughly discussed several times with IMF staff in recent years.

"The Brazilian government understands that standard criteria for national statistics are necessary for the IMF. However, since the current criteria distort the estimation of Brazil's gross general government debt, we request a methodological review," said the letter, a copy of which was obtained by Reuters.

Under IMF standards, gross debt accounted for 68 percent of Brazil's gross domestic product by the end of last year, compared with the central bank's 58.7 percent reading.

Mantega is asking the fund to reconsider including the amount of National Treasury debt held by the central bank from the calculation of debt, saying the securities are not used as collateral in repurchase agreement transactions.

Mantega's request comes at a time when investors have grown concerned over government efforts to relax accounting standards in Brazil. Over the past couple of years, the government has excluded capital spending in some state-run companies from the calculation of the so-called primary budget surplus - a key measure of fiscal performance.

(Reporting by Guillermo Parra-Bernal; Editing by Philip Barbara)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Earnings Season

Earnings Season

Reliance Q4 sales rise, refining margin narrows.  Read 

Innovative Solution

Innovative Solution

Turning smog into jewels - a Dutch designer's solution to Beijing's pollution.  Video 

Insider Trading

Insider Trading

Rajaratnam's brother loses bid to dismiss insider trading charges.  Full Article 

Literary Giant Dies

Literary Giant Dies

Mourning and memories in Gabriel Garcia Marquez's languid hometown.  Full Article 

S&P on India

S&P on India

S&P: India's ratings to depend on next govt econ, fiscal policies.  Full Article 

Ambitious Aim

Ambitious Aim

In green car race, Toyota adds muscle with fuel-cell launch.  Full Article 

Bond Market

Bond Market

A star abroad, RBI boss riles bond traders at home  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage