After an official mission to the country that analyzed the Brazilian economic situation, the International Monetary Fund (IMF) has recommended structural changes in the Brazilian economy, including the revision of a formula for minimum wage, the approval of the spending cap, and social security and labor reforms in Brazil. Currently, Brazil's minimum wage is calculated at the rate of consumer-price inflation in the previous year and at GDP's growth rate from the previous two years. In the IMF's view, this formula affects the growth of pensions and other benefits, and is therefore a major source of fiscal pressure over the medium term.

However, according to the statement issued on Thursday (Sep. 29), the IMF considers that the government made right when proposing a cap on public spending at the rate of consumer-price inflation in the previous year, because it would help improve the long-term trajectory of public spending and permit the stabilization and eventual reduction of public debt as a share of GDP.

Regarding social security, the IMF defended a comprehensive reform, including a modification of the rules governing retirement age. It should also encompass the regimes for public sector employees at all levels of government, and it should include provisions aimed at protecting the most vulnerable. The Fund also defends a labor reform in Brazil aimed at facilitating productive employment and reducing incentives for informality, thus promoting job-creation.

The IMF also advocates regulatory changes to make the concessions program more attractive to investors, and an opening of the economy by reducing tariff and nontariff barriers.

National Treasury Secretary Ana Paula Vescovi made remarks on the IMF's report on Brazil. "We value the international evaluations, which help assess fiscal consolidation measures," she said.