Brazil ended last year in an even weaker state than it started, as worsening political, economic and fiscal woes continued to weigh on the GDP outlook. Output is expected to have contracted in 2015 and the recession looks set to persist through 2016. Even as the economy slipped into recession last year, interest rates soared to 14.25% in the face of accelerating inflation, which ended 2015 at 10.67% (y-o-y). The central bank finds itself in a bind given that high interest rates have failed to tame inflation, but continuing to tighten monetary policy runs the risk of pushing up debt servicing costs even further. Meanwhile, fiscal adjustment efforts were dealt a blow last month following the resignation of the respected finance minister Joaquim Levy.