RIO DE JANEIRO, Sept. 26 (Xinhua) -- Brazil's economy is showing signs of recovery and any talk of crisis is an exaggeration, an International Monetary Fund (IMF) official said here Thursday.
The world lender's executive director for Brazil, Paulo Nogueira Batista, made the remarks when commenting on the latest edition of The Economist magazine, which wondered whether Brazil's economy had failed.
"Brazil went through a period of great success ... Now there is a more negative assessment that is going to the opposite extreme," he said at a business seminar.
"I think Brazil is growing less than it can, but I think that now we are experiencing a more clear recovery. The figures show that the economy is warming up again," he added.
According to Batista, the 2011 deceleration of the Brazilian economy was planned, because the government believed the economy was overheating.
The surprise, he said, was not that there was a slowdown in 2011, but how difficult it has been to overcome that slowdown in 2012 and 2013.
Brazil's economy is solid, Batista said, citing the decreasing unemployment rate and the strength of the job market.
"The fiscal fundamentals are pretty sound, and so is the monetary policy. Financial system regulation is good, reserves are high and so is foreign direct investment," he said.
He warned, however, that falling current account figures are a bit worrisome.
Brazil accumulated a current account deficit of 57.9 billion U.S. dollars from January to August, more than the total in 2012.
"I think they should keep an eye on it, as it is not convenient to have a large current account deficit. It is a worrisome, but not alarming matter," he said.
Bolstering Batista's view was the latest Financial Stability Report (REF) from the Central Bank of Brazil, which holds that Brazil's banking sector has sufficient liquidity and resilience to withstand market turbulence.
The report, released Thursday, covers the first half of the year, analyzing the financial market, its resistance to external shocks and its medium-term outlook.
Despite a volatile global market that impacted exchange rates and credit availability, especially in emerging economies like Brazil, the country fared relativity well, the bank said.
"The impact of financial market uncertainties in the first half of 2013, reflected in global liquidity and rise in market volatility, proved the ... resilience of the Brazilian banking system," the bank said.
According to the bank, the Brazilian banking system's solvency stays at comfortable levels and its Basel Index remains elevated, at an average 16.9 percent in the first half of 2013, well above the required minimum 11 percent.
In addition, stress tests carried out by the bank showed that the Brazilian banking system maintained its resilience even when confronted with scenarios in which macroeconomic conditions have significantly deteriorated.