Brazil's Palocci expects smooth IMF review

www.forbes.com Reuters, 02.12.03, 5:17 PM ET BRASILIA, Brazil, Feb 12 (Reuters) - Brazil's Finance Minister Antonio Palocci said on Wednesday a review by a team of visiting officials from the IMF should proceed smoothly with no expected changes to the terms of a $30 billion loan accord with Latin America's largest economy. "There are no points of tension," Palocci said. "I believe we will have a calm review of the deal. There is no projection of any important change." The loan is the largest ever granted by the IMF. The IMF loan deal, struck last year amid a loss of investor confidence ahead of presidential elections, obliges Brazil to post a primary budget surplus of 3.75 percent of gross domestic product. The primary surplus excludes debt servicing costs. The new government of President Luiz Inacio Lula da Silva announced last week that it is targeting a budget surplus of 4.25 percent of GDP but it is not yet clear whether that will be incorporated into the terms of the IMF deal. The IMF team, which is expected to stay for two weeks, met with Central Bank officials on Wednesday. The review is necessary for the IMF to free up the next tranche of the loan -- of $6 billion -- which Brazil has the right to draw down as of March.