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Brazil Industry Federation Says Millions Will Lose Jobs

People from various social movements and union workers attend a demonstration in support of human rights and democracy at Paulista avenue in Sao Paulo's financial center, Brazil, Sept. 15, 2015.

Millions of workers will lose their jobs this year because of the recession that has hit Latin America's biggest nation, a Brazilian industry federation said Wednesday.

The Rio de Janeiro State Federation of Industries Wednesday said a job market analysis it recently conducted shows that between 1.2 million and 1.6 million jobs will be lost in 2015 — the worst contraction in 17 years.

Previously, the worst figures had been registered in 1998 when Brazil lost nearly 580,000 formal jobs.

"We don't see any signs of improvement in the short term," federation economist Marcelo de Avila told the Folha de S. Paulo newspaper.

The government's Institute for Applied Economic Research said earlier this month that more 1 million formally registered workers could lose their jobs by year's end.

In late August, the government statistics bureau IBGE said Brazil's gross domestic product contracted for the second consecutive quarter, sending the Brazilian economy into a technical recession.

The bureau said the economy shrank 1.9 percent in the second quarter compared with the previous three months. Gross domestic product in the first quarter contracted 0.7 percent.

Brazil's economy has been hit by a drop in international commodity prices, sluggish global economic growth, rising inflation and high interest rates.

"We calculate that between 1.5 million and 2 million workers in the formal and informal job markets will lose their jobs because of recession," economist Gesner Oliveira, president of Sao Paulo consulting firm GO Associados wrote in a Wednesday email.

"Given that the economy is not expected to resume growing until 2017, the job market will continue to weaken next year," he said.

He said the construction and manufacturing industries were the ones where workers will suffer the most.