OECD predicts Brazil to see 3.1 percent contraction in economic growth in 2015
Xinhua, November 5, 2015 Adjust font size:
The Organization for Economic Cooperation and Development (OECD) on Wednesday predicted that the Brazilian economy would contract by 3.1 percent this year and 1.2 percent next year.
In a report released in Brazil, the OECD admitted that the Latin America's largest economy is undergoing a "critical moment" due to high inflation, rising unemployment and growing interest rates, all of which are following a recession seen in the first half of the year.
"Brazil is living a critical moment, since its fiscal situation is challenging, inflation is rising, and the favorable factors of high raw material prices and a young population are ending," concluded the OECD.
"Brazil must control the expansion of public spending, make them more effective, and reform its retirement system," suggested the OECD in the report, adding that it must also tackle the challenge of maintaining social policies that have reduced poverty in the country in recent years.
The OECD recommended that Brazil "moves forward with the fiscal adjustment plan" promoted by the government to adjust battered public funds and restore market confidence.
"Progress must continue on the fiscal and monetary fronts," said the OECD, while stressing that "ambitious structural reforms are urgently needed to diminish numerous productivity gaps" in the country. Endit