Fitch forecasts lower recession in Brazil for 2016

The stabilization of commodity prices is likely to improve the economy in emerging countries and help curb recession in nations like Brazil and Russia. The conclusion was made by the ratings agency Fitch, which released Wednesday (Jul. 27) a report entitled Global Economic Outlook, with forecasts for the global economy for the upcoming months.

For Brazil, Fitch foresees that the economy is to shrink 3.3% this year, compared to the 3.8% decline predicted in March. The agency also estimates that the country will recover in 2017 by growing 0.7%, and face a larger expansion in 2018: 2%.

According to the ratings agency, which removed the country's investment grade in 2015, Brazil's gross domestic product in the first quarter is likely to show a better performance than the expected. To their judgment, in both Brazil and Russia, the economy should start to become stable before the year is over.

The agency maintained the growth predicted for the world's 20 main economies at 2.5% in 2016. As for 2017, the estimate remained at 3%.

Translated by Fabrício Ferreira