IMF chief :Brazil weathering economic turmoil

Brazil's economy is weathering the global economic turmoil and the crisis in the eurozone thanks to "solid" economic policies, International Monetary Fund chief Christine Lagarde said Thursday. "Brazil from the IMF point of view has had a very solid track record, it's in very good economic condition, thanks to very solid macroeconomic policies," Lagarde said in a visit to the Brazilian capital. She said Brazil has managed to contain inflation and keep its fiscal position in good shape amid the global difficulties. "Brazil is more immune and better protected than many other countries from the spillover effects, the consequences if you will, of the current euro crisis and its developments," she said. IMF forecasts "lead us to believe the global economic outlook will be lower ... than we had believed" both in Europe and other parts of the world, she said. The comments came as the Brazilian government unveiled a package of measures to stimulate the economy and domestic consumption in the face of what is being seen as global slowdown in growth. The government announced a reduction of the tax on financial transactions on consumer credit from 3.0 percent to 2.5 percent, and the elimination of a 2.0 percent tax on foreign stock market purchases. Taxes on appliances such as refrigerators, stoves and washing machines were also cut. Brazil's central bank on Wednesday cut its base rate by another half point to 11 percent, a move anticipated by markets and in line with official efforts to bolster the economy amid a grim global economic outlook. Earlier this month, officials said Brazil's economic growth could be zero in the third quarter. In the second quarter, gross domestic product rose 0.8 percent compared with the previous one. The Brazilian economy grew 7.5 percent last year, in full recovery from the 2008 financial crisis. In a statement at the end of the visit, Lagarde again praised Brazil's economy, which combines "economic stability, growth and significant progress in reducing poverty and inequality - even becoming an international benchmark in that area." She said Brazil's economic resilience stemmed from "competent macroeconomic management based on the three pillars of fiscal responsibility, inflation targeting and flexible exchange rate." Brazil's "solid and well-capitalized banking sector" has helped buffer the country from the global financial crisis, but it is impossible to be fully immune. "In our highly interconnected world, nobody is," said Lagarde.