Brazil Analysts Ring in New Year With Deeper Recession Forecast

Brazil analysts expect a deeper recession this year than previously forecast, as economic activity and confidence sink amid a political crisis.

Latin America’s largest economy will shrink 2.95 percent this year, according to the weekly central bank survey of about 100 economists, versus a prior estimate of a 2.81 percent contraction. It was the 13th straight week analysts lowered their 2016 growth forecasts.

Brazil’s policy makers are struggling to control the fastest inflation in 12 years without further hamstringing a weak economy. Finance Minister Nelson Barbosa, who assumed the post in December, has faced renewed pressure to moderate austerity proposals aimed at bolstering public accounts and avoiding further credit downgrades. Impeachment proceedings and an expanding corruption scandal also stand to hinder the passage of economic policies.

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