The government lowered its growth forecast from 2.4 percent to 2.1 percent, and warned an even bigger cut could be coming, citing the effect of the global health crisis and the resulting plunge in oil prices. The economy ministry said the reduction - 0.3 percentage point - reflected "the most likely scenario," but warned the outbreak could end up shaving half a percentage point off the country's economic growth this year.

Some private analysts say the impact could be even worse, lowering their forecasts for the growth of the world's ninth-biggest economy to 1.5 percent or less.

Brazil has 34 confirmed cases of the new coronavirus. It has not reported any deaths so far.

But the economy is being hit hard because of Brazil's close ties with China - its largest trading partner and the main destination for its key commodity exports.

President Jair Bolsonaro has urged Brazilians not to panic in the face of the virus, saying its impact "is overstated."

Economy Minister Paulo Guedes said Monday the government was "completely calm and confident," even as the Sao Paulo stock market lost 12.7 percent, its worst day since 1998.

Copyright Agence France-Presse, 2020