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:
  • Most Popular
  • Most Shared

Pending Reform

REUTERS SHOWCASE

Power Theft

Power Theft

India to invest $4 billion to tackle power theft  Full Article 

Debt Funds

Debt Funds

India monitors foreign flows into debt funds, may tighten rules  Full Article 

Bulgari Back in India

Bulgari Back in India

CEO: we shouldn’t have left India so we’re back  Full Article 

 Hindu "Modi-fication"

Hindu "Modi-fication"

Fears grow about Hindu "Modi-fication" of education  Full Article 

Weak Credit

Weak Credit

Hard to hit tax revenue target, credit weak - Jaitley  Full Article 

China Rate Cut

China Rate Cut

China surprises with interest rate cut to spur growth  Full Article 

Gold Imports

Gold Imports

RBI cautious on response to gold import surge  Full Article 

Economic Corridor

Economic Corridor

China commits $45.6 billion for economic corridor with Pakistan  Full Article 

Overseas Funds

Overseas Funds

RBI says overseas borrowed funds can be parked with banks in India  Full Article 

Reuters India Mobile

Reuters India Mobile

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