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Brazil's Q2 economic slowdown worse than expected: IMF

Xinhua, September 4, 2015 Adjust font size:

The International Monetary Fund (IMF) said Thursday that Brazil's economic contraction of 1.9 percent in the second quarter was worse than predicted.

In a statement received here, the IMF attributed the poor performance to lower consumer confidence and deterioration of political conditions in the country.

Such conditions, coupled with macroeconomic adjustments being made by the government, would weaken domestic demand and foreign investor confidence, it warned.

Brazil has also now technically entered into recession after recording two consecutive quarters of negative growth. Financial markets predict that Brazil's GDP could drop by 2.26 percent this year, the worst fall in 25 years.

In order to return Latin America's largest country to growth, the IMF recommends that the government carry out a package of structural reforms to improve business climate and begin to recover lost market confidence.

It further suggested that Brazil focus on educational and employment reforms to boost competitiveness and productivity. Endi