Brazil Says Turmoil Not to Effect Economy

Although acknowledging that forecasts for the country’s GDP growth next year continue to decline, Brazil’s Finance Minister Henrique Meirelles says that the government expects Brazil will register some growth in the first quarter of next year. Meirelles also said that the political tension caused by the recent plea-bargains by Odebrecht executives will not affect the country’s economy.

“Our expectation is that Brazil is already working with growth in the first quarter of 2017,” said  Meirelles during a conference in Rio de Janeiro. According to Meirelles, the government is forecasting a 2% gross domestic product growth in the last quarter of 2017 compared with the last quarter of 2016, Agencia Brasil reported.

Financial institutions surveyed by Brazil’s Central Bank for the weekly Focus Bulletin, however, are not that optimistic. The entities decreased the forecast of the GDP for 2017 from 0.70% to 0.58%. It is the ninth consecutive reduction of GDP by the group of over 100 financial consultancies.

The finance minister noted, however, that GDP forecasts are an average of 2017 compared to an average of 2016 and since in 2016 the GDP fell a lot, the 2017 ‘growth trend’ will start from a very low base.

Meirelles also said that the political tension caused in the past two weeks by the recent plea-bargain agreements by Odebrecht executives will not affect the country’s economy.

Odebrecht executives have testified the Brazilian engineering firm illegally funded the 2014 campaign of the country’s impeached leftist president, Dilma Rousseff, a top newspaper reported on Monday, a development that could lead to the removal of her successor, Michel Temer.