Brazil’s unemployment rate hit 12% between October and December, another record high, official data showed yesterday even as the economy is forecast to slowly exit deep recession.
That amounted to 12.3mn people looking for work at the end of 2016, a third more than in the last quarter a year earlier, the Brazilian Institute for Geography and Statistics said.
Market analysts with Gradual Investimentos consultants had predicted the unemployment rate would hold at the previous quarter’s 11.9%, which was also a record high.
Joblessness has dented the popularity of the market-friendly government of President Michel Temer, who took over last year after the impeachment of president Dilma Rousseff with promises to restore the Latin American giant’s economy to health.
In the final quarter of 2015 — still under Rousseff’s administration — unemployment was 9%, while a year earlier it had been 6.5%.
Brazil’s economy shrank 3.8% in 2015 and is expected to have contracted a further 3.5% in 2016, the worst recession in a century.
The central bank predicts a return to economic growth of 0.8% next year, although the International Monetary Fund foresees growth of just 0.2%.
In another sign of the country’s financial troubles, the central bank said the budget deficit hit a record high in 2016. 
The primary budget deficit — excluding interest payments — reached 155.8bn reais. The good news was that it remained within the government’s target.
As it tries to stimulate the economy while helping the stubbornly high inflation to keep dropping, the bank is expected to make further cuts to its key interest rate.
Last month the bank cut the rate by a bigger than expected 0.75% to 13%, down from 14.25% in October but still one of the world’s highest.
Market expectations are for cuts to about 10.9% this year.




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