MercoPress. South Atlantic News Agency

Brazil's economy expected to further contract, according to the Central bank

Forecast is from Boletin Focus, a weekly Central Bank survey of analysts from about 100 private financial institutions on the state of the Brazilian economy.

Analysts expect Brazil's economy to contract by 3.19% this year, with inflation hitting 10.38%, the Central Bank said Monday. GDP and inflation estimates come from the Boletin Focus, a weekly Central Bank survey of analysts from about 100 private financial institutions on the state of the national economy.

 The government started using the survey in preparing its own forecasts this year.

Last week, analysts said they expected Brazil's economy to contract by 3.15% this year and 2.01% in 2016. Analysts revised their inflation estimates upward from 10.33% last week to 10.38% in the latest report.

In 2016, analysts now expect Latin America's largest economy to contract by 2.04%, with the inflation rate falling to 6.64%.

Brazil's economy is headed for its worst economic performance since 1990, when it contracted by 4.35 percent. Brazil is in a recession, with GDP contracting for two consecutive quarters. Brazil's economy contracted by 2.1% in the first half of this year.

Economic growth has also been hampered by the spending cuts implemented by President Dilma Rousseff's administration to reduce the budget deficit and control inflation.