LAUSANNE, Switzerland -- The political and economic turmoil in Brazil will "inevitably" affect next year's Olympics in Rio de Janeiro, a senior IOC official said Wednesday, as Brazilian organizers declared that preparations remain fully on track for the Games.
With the opening ceremony less than eight months away, Brazil is dealing with severe recession, impeachment proceedings against President Dilma Rousseff and a massive corruption scandal involving state-run oil company Petrobras.
"They have political and economic difficulties," IOC vice president Craig Reedie said. "Inevitably, they will affect the Games. There are challenges. I think they and we will have to get through it."
Reedie spoke after Rio organizers made their latest progress report to the International Olympic Committee executive board. The Brazilians outlined the progress they have made in venue construction over the past year, saying most of the facilities are now ready for South America's first Olympics.
"There has been a massive improvement of the situation in the past months," Reedie said. "That's good news. Now you have to determine the service levels that athletes and international federations expect."
Brazil's economy was booming when Rio was awarded the Games in 2009, but the country is now in its worst recession since the 1930s. The real has lost a third of its value this year, gross domestic product has tumbled, inflation is nearing 10 percent and unemployment has soared to nearly 8 percent.
On top of that, Brazil is mired in a spiraling kickback scandal centered on Petrobras, and Rousseff -- whose popularity rating has sunk to about 10 percent -- is facing impeachment proceedings based on allegations of fiscal irregularities by her government.
Rio Mayor Eduardo Paes, who has emerged as a central figure in the Olympic project, spoke to the IOC board by video conference from Brazil. Officials said he briefed the members about the economic problems and the impeachment process.
Rio organizers are trying to cut 2 billion reals ($530 million), or almost 30 percent, from their operating budget of 7.4 billion reals ($1.9 billion). Rio officials say most of the cuts involve "behind-the-scenes" facilities.
"We are in a moment where we need to adjust everything," Rio organizing committee chief Carlos Nuzman told reporters in Lausanne. "This is normal. All the games are the same. We need to adjust everything and we are doing this with the IOC, the international federations and the NOCs (national Olympic committees).
"I think the most important thing is that nothing is affected for the athletes, that nothing affects the organization of the games," Nuzman added. "We have been working for seven years. We can say today we are on the way. For the venues, almost everything is ready."
The IOC is discussing separately what steps it can take to reduce the spending in Rio, including possible reductions in food services, transportation and seating for Olympic officials.
The IOC also asked Brazilian organizers about the severe water pollution in Rio that affects the sailing, rowing and canoeing venues. A new round of testing by The Associated Press found the waterways being used for the Olympics are more widely contaminated by sewage than previously known and pose a greater threat to the health of athletes.
"I explained we are following the World Health Organization, following what they establish," Nuzman said. "We are testing. The athletes, the NOCs, the large majority are very happy."
Reedie said: "There are ways of stopping refuse from getting into the water. They are talking about taking steps to do that."