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article imageBrazil unemployment hits record 12 percent

By Jorge SVARTZMAN (AFP)     Jan 31, 2017 in World

Brazil's unemployment rate hit 12 percent between October and December, another record high, official data showed Tuesday even as the economy is forecast to slowly exit deep recession.

That amounted to 12.3 million 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 percent, 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 nine percent, while a year earlier it had been 6.5 percent.

Brazil's economy shrank 3.8 percent in 2015 and is expected to have contracted a further 3.5 percent in 2016, the worst recession in a century.

The central bank predicts a return to economic growth of 0.8 percent next year, although the International Monetary Fund foresees growth of just 0.2 percent.

In another sign of the country's financial troubles, the central bank said Monday that the budget deficit hit a record high in 2016. The primary budget deficit -- excluding interest payments -- reached 155.8 billion reais.

The good news was that it remained within the government's target.

- Jobs outlook desperate -

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 percent to 13 percent, down from 14.25 percent in October but still one of the world's highest.

Market expectations are for cuts to about 10.9 percent this year. Inflation, meanwhile, has dipped from 10.67 percent in 2015 to 6.29 percent in 2016 and is expected to close 2017 at 4.7 percent.

However, the interest rate cuts have yet to help the jobs market, said Alex Agostini, chief economist at Austin Rating.

Employment is "the last variable that will see improvement" because for now businesses are fighting for greater productivity rather than hiring.

"Those who have work will have to work more," he said.

For Jones Tome de Carvalho, who lost his job as a car park attendant, the promised recovery remains far off.

"We come here to find work," the 25-year-old said outside a government jobs center in Rio de Janeiro. "Then we go home sad. There are no jobs. Those who have them should hold on to them because they're hard to come by."

Adriana Brito, 38, said she'd been looking for work for six months since losing her security guard job.

"I'm looking for a post in the same field, but it's hard, especially when you're a woman," she said.

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