Recession-hit Brazil offers $20 bn in stimulus loans

Brazil's government Thursday said it would offer $20 billion worth of special loans to stimulate the recession-stricken economy.

It will extend credit lines of up to 83 billion reals ($20.4 billion) for farming, housing and infrastructure and for small and medium-sized companies, Finance Minister Nelson Barbosa said.

The credit will be offered via public banks and other bodies "using existing resources in the best way possible" so as not to weigh on the public finances, he told a news conference.

Brazil, the world's seventh largest economy, had a gloomy start to the year as it prepares to host the summer Olympic Games in August.

Official figures showed that 1.5 million jobs were destroyed last year.

The IMF said Brazil's economy contracted 3.8 percent in 2015 and will shrink a further 3.5 percent this year.

A finance scandal that sparked impeachment proceedings against leftist President Dilma Rousseff has aggravated the crisis.

Ratings agencies Fitch and Standard & Poor's have downgraded Brazil's credit score, saying Rousseff's government has failed to clean up its public finances.

Rousseff said at an economic forum on Thursday that balancing the books was the challenge for 2016.

"In 2015 we made a fiscal tightening unprecedented in our history," she said.

"We know that there is still much to do," she added, promising further cuts to public spending.

She said she also wanted to revive a controversial tax on financial transactions that was scrapped in 2007.