Given the deterioration of the economic scenario linked to the mismanagement of public accounts and the political crisis that has taken hold, the forecast is that the Brazilian economy will reach the end of 2015 with a contraction of over 3%.
As there are no signs of stabilization, the expectation is that, in 2016, the downward trend will be maintained, with the country shrinking this time by around 2% in relation to the fiscal year that is now ending.
With a negative GDP, high inflation and an overvalued dollar against the real, the outlook for 2016 is bleak, to say the least. Economists expect official inflation to reach 6,64% and GDP to fall by 2,04%. The Broad Consumer Price Index (IPCA) will close 2015 at 10,38% and Gross Domestic Product (GDP) will fall by 3,19%. If confirmed, it will be the worst result in 25 years, that is, since 1990 – when there was a 4,35% decline.
As if that were not enough, there is still the possibility that other risk rating agencies will follow the same path as Standard & Poor's, which recently withdrew Brazil's investment grade.
Read more in our 2016 Trends report by clicking here.
