Brazilian central bank says IMF's gloomy outlook "significant"

The IMF projection that the Brazilian economy will contract by 3.5 percent in 2016 is "significant," Brazil's central bank governor said Tuesday.

Brazil's economy fell into recession in the second quarter of last year.

The IMF expects Brazil will stay in recession in 2016.

Central bank governor Alexandre Tombini said the IMF attributed the rapid drop in Brazil's GDP to "non-economic factors."

The official results from the Brazilian government will come out in March.

In its latest "World Economic Outlook" released on Tuesday, the IMF revised its projections for Brazil sharply downward from a 1-percent contraction to a-3.5 percent contraction this year.

A corruption scandal in state oil firm Petrobras has also weighed on the economy.

According to the report, the "recession caused by political uncertainty and continued repercussions by the Petrobras investigation" would undermine the growth of the economy.

The damage to the Brazilian economy is predicted to have a knock-on effect on all the Latin American and the Caribbean countries, whose economies are predicted to drop by 0.3 percent this year and rise by 1.6 percent in 2017, according to the IMF.

Also on Tuesday, the Fitch ratings agency predicted Brazil's economic recession would be "deeper and longer" than predicted. It also ruled out a rapid recovery of Brazil's investment grade rating.

According to Fitch, the Brazilian economy will contract by 2.5 percent this year due to "continued weaknesses."

In late 2015, Fitch and Standard & Poor both stripped Brazil of its investment grade rating. Endi