Brazil analysts trimmed their 2016 inflation forecast after price increases slowed more than all analysts expected in March and the economy showed signs of a deeper contraction.

Economists lowered their 2016 inflation forecast to 7.31 percent, from 7.43 percent previously, according to the weekly Focus survey conducted March 24. They also pared their 2016 economic outlook to a recession of 3.66 percent, and lowered their 2017 growth forecast to 0.35 percent from 0.44 percent the prior week.

Brazil’s inflation in the 12 months through mid-March fell more than all economists forecast, making its return to single digits for the first time since October. The currency this month also gained most among 16 major currencies as the market gauged a greater probability President Dilma Rousseff will be impeached. While markets responded positively to the political strife engulfing the capital, it is weighing on the outlook for economic rebound.

Inflation remains more than double the government’s target, which is eating into purchasing power of consumers and depressing the outlook for economic turnaround. The economy also shed more than double the amount of jobs analysts forecast in February, bringing the total net job losses in the 12 months through February to a record 1.75 million.

With the economy on track to contract again this year, that will make 2015 and 2016 the first time in more than a century that the economy shrank more than 3 percent for two straight years, according to government economic research institute IPEA.

The real has gained 9 percent this month after the lower house installed an impeachment commission to analyze the case against Rousseff. Economists surveyed by the central bank expect it to close 2016 at 4.15 per U.S. dollar, from 4.2 per dollar the previous week.

With economic activity in sharp retreat, the central bank will refrain from raising its benchmark interest rate to combat above-target inflation, according to economists who foresee it staying at 14.25 percent this year -- its highest since 2006.

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