Brazil going through "perfect storm": OECD official

The Brazilian economy is going through a "perfect storm", an official of the Organization for Economic Co-operation and Development (OECD) told Brazilian daily O Estado de Sao Paulo in an interview published Friday.

According to Alvaro Santos Pereira, director of the country studies branch of the OECD's economics department, political and economic crises are putting Brazil through a very tough time.

"Brazil has been going through a perfect storm in the past few months. The political crisis was very hard, with the corruption scandal bringing down confidence levels. Brazil was also severely affected by the reduction in investments by Petrobras and construction companies, as well as the fall in the prices of raw materials. There is now a lot of new uncertainty in the tourism sector because of the Zika virus. Brazil is going through a tough time," Pereira told O Estado.

Pereira warned that the country would continue to undergo many difficulties in the short term and that recovery would be a slow process. He stressed the need for structural reforms in order to recreate a stable and trustworthy economic environment.

"Recession will continue this year, which will be difficult. In the months to come, Brazil will begin to get out of this situation but at a slower pace. We are predicting zero or almost zero growth in 2017," said the OECD executive.

Brazil's sovereign bonds were recently downgraded by two major credit rating agencies, S&P and Fitch Ratings, with Pereira observing that a reversal of this depends on reforms being carried out in the right way. Furthermore, he said, Brazil would not manage to regain investors' confidence without a credible fiscal adjustment.

"If the country wants to grow, it must regain credibility. It is necessary to not only offer signs that reform will be actively sought for to ratings agencies and investors, but also to regain internal confidence," he told the daily. Enditem