Brazil’s economy will this year have contracted 3.3 percent, but the rate of decline is likely to slow in 2016, to 2.6 percent, said the country’s National Confederation of Industry (known as CNI under its Portuguese language acronym).

According to Brazilian news agency Brasil, the latest CNI projection also points to a year-on-year increase in inflation during 2015; at a rate of 10.5 percent. Industrial output and consumption by households are also expected to have decreased in 2015 and will shrink year-on-year in 2016, CNI added.

Investment is likely to have declined by 15.5 percent in Brazil this year and is expected to contract by 12.3 percent in 2016, according to CNI’s estimates.

Fitch Ratings on Wednesday cut Brazil’s sovereign credit rating to junk status (BB+) with a negative outlook, The Wall Street Journal newspaper reported. The rating agency justified the downgrade on the basis of the increase in the country’s budget deficit, a deeper-than-expected recession, and adverse political circumstances, the media outlet added.