Negative Effects of Car Wash Operation Bring GDP Down by One Point, Says Rousseff to Ministers

07/28/2015 - 10h01

President Dilma Rousseff cited a calculation during a meeting with ministers at the Presidential Palace that suggests that the negative effects from the Car Wash Operation (Lava Jato) on the economy are responsible for the drop of one percentage point in the 2015 GDP (Gross Domestic Product).

The president made this comment when the current economic climate was under discussion, which worries the government because the country is going into recession this year.

The economic team has officially admitted that there will be a decrease of 1.5% in the GDP. That is, the president would attribute to this drop most of the effects of the Car Wash Operation, which investigates deviations in Petrobras.

The market has a more pessimistic forecast, ranging from a decline of 1.7% to up to 2.5% of GDP.

Calculations by the Ministry of Finance on the GDP drop this year show that fiscal adjustment would account for 0.6 percentage point of the decline.

According to other participants of the meeting with the president, she did not go into details of how the calculation might have been done, or made any detailed comments on the subject.

The government has shown concern with contractors having to bring their work to a halt, because they have been affected by investigations in the Car Wash Operation.

Translated by CRISTIANE COSTA LIMA

Read the article in the original language

	Renato Costa - 24.jun.15/Folhapress
	Brazil's president Dilma Rousseff speaks during a ceremony at the Planalto Palace