Economist Nouriel Roubini of New York University warns that "Brazil is on the brink of a precipice" as Latin America’s largest economy struggles amid political strife.

Roubini, one of the few economists who predicted the financial crisis of 2008, predicts that without fiscal adjustment, the country will lose its investment grade rating with other credit rating agencies, borrowing costs will skyrocket and its currency will plunge and the economy will shrink.

But the dire prediction isn’t written in stone.

"Brazil isn't destined to have a crisis, it's possible to avoid it," he told Folha de S.Paulo.

"If they make the necessary adjustments, there won't be any further downgrading and confidence in fiscal policy will improve. That will make people more comfortable about spending,” he said.

“In 2016, if adjustments are made, I think there will be recession in the first six months, but the economy will bottom out midway through the year and then begin to recover. Brazil is not destined to have a crisis. There is a way out, although it is difficult and requires political courage from whoever is in power. For things to stabilize, fiscal adjustment is necessary, there's no other way," he told Folha.

Political turmoil in Brazil is pushing the nation toward the longest recession since the 1930s amid a widening corruption scandal, Bloomberg reports

Brazil’s currency, the real,  has tumbled 31 percent this year, leading world losses, amid concern that Brazil’s political turmoil could exacerbate the recession and cause the nation’s finances to deteriorate further.

Standard & Poor’s has cut the nation’s credit rating to junk, putting pressure on the economic team led by Finance Minister Joaquim Levy to win passage of measures that would shore up the country’s fiscal situation by cutting spending or raising taxes.

Brazilian President Dilma Rousseff has been unable to find support for her initiatives amid an investigation into corruption at the state-controlled oil company that allegedly occurred while she was its chairman, sending her popularity to a record low and generating calls for her ousting. Brazil’s lower house chief suspended a decision whether to start impeachment proceedings as the Supreme Court questioned his guidelines for ousting a president.

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