A week-long truckers’ protest is leaving Brazil with a massive bill, lower growth projections and worse yet -- more strikes to come.
A diesel price cut for 60 days, the latest concession to truckers announced by President Michel Temer late on Sunday, will cost 9.5 billion reais ($2.6 billion), Finance Minister Eduardo Guardia told Bloomberg. A further 4-billion reais shortfall in fuel taxes due to cuts announced last week may be offset if Congress votes to end payroll tax breaks. At the same time economists cut their 2018 growth projections for the fourth consecutive week to 2.37 percent.
Financial markets tumbled on Monday, reflecting just how much investor sentiment toward Brazil has soured. Brazil’s real led losses among 24 emerging market currencies tracked by Bloomberg, falling 2.3 percent to 3.7375 at close of trading. The Sao Paulo stock market index fell 4.49 percent, and is down over 9 percent since the strike began. State-run oil company Petrobras led losses, falling almost 15 percent in the day.