BRASILIA, Aug 18 (Reuters) - Finance Minister Joaquim Levy said on Tuesday that Brazil will put recession behind it next year, refuting economists’ forecasts the Brazilian economy will continue shrinking in 2016.
In an interview with Record TV network, Levy said the fiscal austerity drive that he is leading will be over by next year, and inflation should start slowing.
“Most of the adjustments have already been done. The Central Bank is controlling inflation. The Brazilian economy is diversified, agriculture is doing very well. We will not have recession and inflation should fall in 2015,” he said.
Brazil’s economy is expected to shrink by 0.15 percent next year, following a sharp contraction of more than 2 percent forecast for this year, according to a weekly central bank survey of economists published on Monday.
Brazil has not faced two years of negative growth since the Great Depression of the 1930s.
The central bank survey also showed a slight increase in inflation forecasts for 2016, to 5.44 percent from 5.43 percent in the previous survey. Estimates for gains in consumer prices this year are at 9.32 percent.
Levy is leading an austerity plan aimed at reducing Brazil’s fiscal deficit and restoring business confidence to revive the economy.
He said President Dilma Rousseff was putting her popularity at risk with the fiscal belt-tightening, but has no intention of giving in to calls for her resignation.
“Anyone betting on her resigning will lose, because Dilma is strong. She faces up and does what needs to be done,” Levy said.
Reporting by Anthony Boadle; Editing by Shri Navaratnam