The International Monetary Fund (IMF) on Tuesday cut Brazil's economic growth forecast for 2014 to 0.3 percent, a full percentage point lower than its previous projection.
The figure marks Brazil's second-worst economic performance since 1998, when the economy registered zero growth, according to the agency.
In the first quarter of the year, Brazil's economy contracted 0.2 percent compared to the last quarter of 2013, and in the second quarter it contracted 0.6 percent compared to the first, landing the South American giant in a "technical recession."
The latest forecast is markedly different from that of April 2013, when the IMF first publicized its growth forecasts for this year, saying Brazil was expected to register 4 percent growth.
"In Brazil, gross domestic product (GDP) contracted in the first half of the year, reflecting weak investment and moderate consumption, due to 'tighter' financial conditions (and) continued weakness in business and consumer confidence," the agency said in a press release.
"These factors, along with weak competitiveness, should keep growth moderate for the most part of 2014," the IMF said.
Brazil's government has forecast 0.9 percent growth for the year, while the financial market has projected 0.24 percent growth./.