Goldman Sachs Group Inc. said the crisis in Brazil will get worse before it gets better after the bank last year warned that Latin America’s largest economy was being dragged into a depression.

“Brazil is a mess,” Alberto Ramos, the chief Latin America economist at Goldman Sachs, said at an event organized by the Brazilian-American Chamber of Commerce in New York on Wednesday. “Number 10 used to mean Pele. Now it’s inflation rate, unemployment rate and the popularity rate of the president."

President Dilma Rousseff’s popularity is among the lowest of any Brazilian president on record as her party fights corruption allegations while inflation above 10 percent erodes purchasing power and the sinking economy sheds jobs. The nation is headed toward the deepest recession in a century amid the threat of further credit-rating downgrades after Brazil was cut to junk last year.

The economic crisis is also being reflected in financial markets, where the real is posting the biggest slide among the world’s major currencies over the past 12 months and the Ibovespa is heading toward the worst start to a year in two decades. The real sank 1.4 percent to 4.1099 at 3:03 p.m. in New York after Brazil’s federal police carried out search and arrest warrants in four cities on Wednesday to probe allegations of money laundering related to a graft scheme at state oil company Petroleo Brasileiro SA.

The probe put the spotlight back on the Workers’ Party at a time when Rousseff is trying to regain political momentum amid a pending impeachment process. The target of the investigation is whether construction company OAS SA and the bankers’ housing cooperative Bancoop used real-estate properties to launder money received from kickbacks, said Federal Prosecutor Carlos Santos de Lima. As part of the probe, police are checking whether former President Luiz Inacio Lula da Silva owned one of the properties, an apartment in the Guaruja beach complex.

“We don’t know the bottom,” Claudia Castro, senior analyst at OppenheimerFunds, said during the same event in New York. “It’s hard to talk business when the person across from you will go to jail. We don’t know which government will be there tomorrow.”