Brazilian President Michel Temer scored a key political victory in his efforts to cap government spending, but he was quickly reminded how much work remains to steer Brazil out of its prolonged recession. 

On Wednesday, official statistics showed Brazil’s economy shrank 0.8% in Q3 from Q2. The decline was the seventh straight quarterly contraction, with few signs of a recovery taking hold.

Gross domestic product (GDP) also fell 2.9% from the Q3 2015, the Brazilian Institute of Geography & Statistics said. The data prompted some economists to revise their 2017 growth outlooks. Neil Shearing of Capital Economics lowered his forecast for GDP growth next year to 1% from 1.5%.

“The big story here remains the persistent weakness in consumer spending,” Shearing wrote in a report.

The GDP figures were released a day after Brazil’s Senate approved a spending cap bill pushed by the Temer government. The constitutional amendment would establish a limit on federal spending for 20 years, capping it to inflation. The move is intended to help narrow Brazil’s budget deficit, which is on pace to end the year at nearly 10 percent of GDP. 

The vote took place as thousands of demonstrators rallied outside Congress protesting the austerity measure, which is expected to be approved by lawmakers in a final vote on December 13.

Samar Maziad, a senior sovereign analyst at Moody’s, said the vote on the spending cap was “a step in the right direction” toward getting Brazil’s fiscal house in order. 

“If it is followed by additional fiscal reforms, including social security, we expect it will improve Brazil’s credit profile,” he said. 

However, the latest economic data revealed the depth of Brazil’s economic depression. Across the economy, all sectors fell during Q3, including household consumption, services and agriculture. Investment spending also dropped, falling 3.1% in Q3 from Q2. 

Alberto Ramos, chief Latin America economist at Goldman Sachs, said that he expects the economy to remain weak during Q4 this year and to tentatively stabilize during the first half of 2017. 

“We forecast a shallow, underwhelming recovery in 2017, with real GDP projected to grow 1.1%,” he said in a research note.