It’s difficult to be precise, but we think the direct impact of the corruption scandal at Petrobras, including the effects of reduced investment by the company and others that have been implicated, could shave around 0.5% off Brazil’s GDP this year. But there will be indirect costs too. Brazil’s international investment image is likely to suffer and the political fallout from the scandal will make much-needed reforms to raise growth even more difficult to push through Congress.
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