The International Monetary Fund may next year change accounting rules on government investments in its loan accords, a top official for the multilateral lender said on Thursday.

The move follows pressure from Brazil to treat investments that produce economic or fiscal returns differently, to help boost developing nations' infrastructure spending.

"We discussed the possibility of increasing public investments in a fiscally responsible way," Teresa Ter-Minassian, the IMF's director of fiscal affairs, said after meeting Brazil's Finance Minister Antonio Palocci.

"I think over the next weeks we are going to discuss in greater detail specific investments that will be given preferential treatment," she added. Asked if such investments could be made as early as next year she said: "I hope so."

Ter-Minassian leads a group of IMF negotiators responsible for evaluating possible shifts in investment accounting in IMF accords.

Brazil must attain this year a public sector primary budget surplus, which excludes debt servicing costs, equal to 4.25 percent of gross domestic product as a condition of its current $40 billion IMF loan. The loan expires in March.

The IMF has recognized Brazil and Latin America must boost their low infrastructure investment if they are to have sustainable economic growth.

(From Reuters, November 19, 2004)

__________