IMF PLEDGES SUPPORT FOR BRAZIL'S ECONOMIC POLICY

The International Monetary Fund yesterday pledged support for Brazil's economic policy programme and said it expected to be able to put together a financial package once tails were announced later this month. Brazil's financial problems have aroused fears of a disorderly devaluation; the country's budget deficit is more than 7 per cent of gross domestic product and some economists believe a severe crisis in Brazil could force the world economy into recession next year. A joint IMF/Brazilian government statement said Brazil would this month announce a fiscal adjustment programme, designed to stabilise the ratio of the public debt to gross domestic product by 2000. That would require a primary public sector surplus, before interest payments on existing debt, in the range of 2.5 - 3 per cent of GDP.