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IMF: Brazil's economic recession coming to an end

Xinhua, September 30, 2016 Adjust font size:

The International Monetary Fund (IMF) said Thursday that Brazil's economic recession is coming to an end, with growth expected to return in 2017, albeit at a low 0.5 percent.

"Growth should resume gradually in 2017. There are tentative signs that the recession is nearing its end," said the IMF in a statement, which stated it predicted a contraction of 3.3 percent in 2016 and growth of 0.5 percent in 2017.

"The projection is predicated on the assumption the fiscal spending cap and social security reform are approved in a reasonable timeframe, and the government will meet the proposed fiscal targets for 2016 and 2017," it continued.

According to the IMF, should these improvements be met, uncertainty should decline and investment should recover, leading to a return to growth starting in late 2016.

However, the institution warned that growth would be slow as "a more rapid recovery in economic activity is hampered by excess corporate leverage, high unemployment and weak balance sheets of households."

The IMF expressed its support for some of the moves taken by the new government of President Michel Temer, including its concessions and privatization program, improved governance for state-owned enterprises, and new management at Petrobras. Enditem