A report that was released earlier in the week noted that the slow pace of economic recovery in Brazil had dragged down its business confidence index (BCI) for the month of May to its lowest point since November 2017.
The BCI for Brazil fell down by 0.6 in May to reach 92.8 points which is the lowest point for the index since it had touched 92.1 points for the country in November of 2017, said the report which was created and published by Brazil’s Getulio Vargas Foundation (FGV) – a policy think tank.
“After remaining stable at the beginning of the year, business confidence retracted for the second month in a row, influenced by dissatisfaction with the slow pace of the economy, political uncertainty and poorer external outlooks,” the FGV said.
There is every chance that the confidence index could be much lower for the month of June because the survey for the index was carried out before the country was struck by the huge truckers’ strike that struck the entire country and which has paralyzed the entire economy for the country for more than week after starting on May 21. This strike has potentially led to large losses for many businesses and the economy, said the foundation.
The sectors that noted the largest erosion of confidence were the sales sector with a drop of 4.1 point followed by the service sector with a drop of 2.4 points. The confidence index however was steady for the industrial and construction sectors.
The Brazilian economy is on a path to recovery after the country was hit by its worst recession every in 2015 and in 2016 where the economy saw a drop in its gross domestic product (GDP) by almost 7 per cent.
There was a recovery in the economy in 20-17 with a growth rate of GDP at 1 per cent while it was projected that the growth rate of 3 per cent would be touched by the economy in the current year. But the economic growth has been pulled back by high unemployment and lower domestic spending.
2.37 per cent was the latest growth prediction for the economy for the current fiscal year.
According to the latest figures of the state statistics agency IBGE which was published on Tuesday, 12.9 per cent was the rate of unemployment for the three-month period from February to April.
Meanwhile, the nationwide truckers’ strike in the country entered the ninth day on Tuesday. Truckers are protesting the soaring fuel prices and the strike has crippled the Brazilian economy.
There were a significant number of truckers who were at strike on Tuesday despite the Brazilian government claiming that it had reached an agreement with the primary truck drivers’ union late on Sunday.
“Throughout this week, my government has always been open to dialogue,” said Brazilian President Michel Temer on Twitter. “We have done our part to alleviate problems and sufferings.”
(Adapted fromXinhuanet.com & Aljazeera.com)