IMF anticipates gradual recovery of Brazilian economyStaff Writer | November 17, 2016
International Monetary Fund's (IMF) said that the Brazilian economy could be close to pulling out of a grueling recession, but faces a long and bumpy recovery.
LatAm The IMF projects output growth of -3.3%
“Directors strongly emphasized the need for fiscal consolidation to ensure macroeconomic stability,” the IMF said in a statement.
Disappointing industrial output and consumption data has diminished hopes of a faster recovery next year with some government officials scaling back their 2017 growth projections to 1% from 2%.
The IMF is even more pessimistic with a forecast of 0.5% growth next year after two straight years of contractions.
According to the report, Latin America’s largest economy has suffered its deepest recession in decades. Since the beginning of 2015, the unemployment rate has doubled to more than 11% and 2.7 million formal jobs have been lost.
A gradual recovery is expected to start in the second half of 2016, assuming that reforms continue, political uncertainty diminishes, and that other economic shocks run their course.
The IMF projects output growth of -3.3% in 2016 and 0.5% in 2017. ■