Brazil saw the worst monthly level of economic activity in May since January 2010, the country's central bank said Thursday, with economic activity contracting by 0.51 percent in May.

According to the Index of Economic Activity, considered to be a close prediction of gross domestic product (GDP) results, economic activity has dropped 5.43 percent in the last 12 months.

The results showed clearly the difficulties that the Brazilian economy was continuing to undergo after a deep recession. The economy contracted 3.8 percent in 2015.

According to financial market expectations, Brazil's GDP is set to contract by a further 3.3 percent in 2016, which would be the first time the country had ever seen contractions for two successive years.

This is made worse by rising inflation, which reached 10.67 percent at the end of 2015, forcing the central bank to raise interest rates to 14.25 percent, the highest level in years.

Source:
courtesy of XINHUA NEWS AGENCY

by Xinhua News Agency

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