Brazilian police on Tuesday arrested two executives involved in building a nuclear power plant for Eletrobras, pulling the state-run utility into a corruption scandal that has engulfed government-owned oil company Petrobras.
Standard & Poor's on Tuesday said Brazil could lose its coveted investment-grade rating in the coming year if fallout from a number of corruption investigations further stymies economic growth and the implementation of austerity measures.
Analysts expect Brazil's economy to contract by 1.76% this year, marking its worst performance since 1990, with the inflation rate hitting 9.23%, the Central Bank said on Monday.
Banks in Brazil are now forecasting economic contraction in 2016 and if this proves correct it will be first time Latin America's largest economy shrinks two years running since the Great Depression.
Tens of thousands of workers at Brazil's state-owned Petrobras went on a nationwide 24-hour strike on Friday to protest the oil company's plans to sell 15.1 billion dollars worth of assets by the end of next year to help pay off a debt of about 120 billion dollars.
Brazilian prosecutors presented formal charges on Friday against the chief executive of Latin America's largest engineering firm and other senior executives detained last month in a landmark investigation meant to show that the country's elite are not above the law.
Brazil's currency, the Real, tumbled on Thursday after the government announced it would slash its fiscal savings goals for this year and next, raising investor fears that the country may lose its investment-grade credit rating.
Brazil's recession will extend into next year, hurting President Dilma Rousseff's efforts to shore up public finances and arrest a sharp increase in unemployment, Itau Unibanco's chief economist said in a report on Wednesday. Ilan Goldfajn forecasts a drop of 2.2% in 2015 and 0.2% in 2016, down from previous estimates for a decline of 1.7% in 2015 and an increase of 0.3% in 2016.
Brazil dramatically lowered its fiscal savings goals for 2015 and 2016 on Wednesday due to plunging tax revenues, and announced new spending cuts to underscore its commitment to austerity. The government cut its primary surplus goal for this year to 8.7 billion reais ($2.70 billion), or 0.15% of GDP, from 66.3 billion reais, the equivalent of 1.1% of GDP, originally budgeted.
Brazilian President Dilma Rousseff's popularity slumped to a new low and support for her impeachment grew amid a deepening corruption scandal and a severe economic downturn, according to an opinion poll published on Tuesday.