RIO DE JANEIRO, Oct 22 (Reuters) - A corruption scandal and sharply reduced investments at state-run oil company Petrobras will likely slice more than 2 percentage points off Brazil's gross domestic product in 2015, a finance ministry report said late on Wednesday.
The problems at Petrobras, as the company is known, are having a spillover affect on major contractors and suppliers and are helping make the country's recession one of the longest and deepest on record, the report said.
Brazil's economy is expected to contract 3 percent in 2015 and 1.22 percent in 2016 according to the median forecast in the most recent weekly central bank survey of about 100 economists.
Many major contractors have been banned for working with Petrobras until their role in the scandal is cleaned up.
Petrobras, facing lower oil prices, project delays and a price-fixing, bribery and political kickback scandal, has cut its 2015-2019 investment budget twice this year. The latest came earlier this month with an 11 percent cut to $25 billion for 2015 and a 30 percent cut to $19 billion for 2016. (Reporting by Marta Nogueira and Jeb Blount Editing by W Simon)