Itau Unibanco SA forecasting Brazil’s economy will contract for a second consecutive year

Itau Unibanco SA is now forecasting Brazil’s economy will contract for a second consecutive year as unemployment continues to rise and the government struggles to contain above-target inflation.

Brazil’s largest bank reduced its forecast for next year’s gross domestic product to a 0.2 percent contraction from 0.3 percent growth. It also predicts this year’s recession will be deeper than initially expected, with Latin America’s biggest economy shrinking 2.2 percent, instead of 1.7 percent.

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