Weekly Report - 28 July 2016 (WR-16-29)

In mid-July, the International Monetary Fund (IMF) revised upwards its projections for Brazil’s GDP. The forecast still makes for grim reading, but it is an improvement. The IMF now expects Brazil to contract by 3.3% in 2016, rather than 3.8%. Instead of zero growth in 2017, the IMF is now forecasting an expansion of 0.5%. The Institute of International Finance (IIF) was even more positive, predicting growth of 1.5% in 2017. Although Brazil’s economy appears to be finally bottoming out, after almost two years of recession, its dysfunctional politics may still hamper prospects for growth.