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The pessimistic scenario both internally and externally led the National Confederation of Industry (CNI) to reduce its projection for the growth of the Brazilian economy in 2018 by 2.6% expected there at three months to 1.6% forecast in the quarterly economic report, Efe reported.
According to employers, industrial production in Brazil this year will no longer grow the expected 3% in April, but 1.8% according to the calculations of the new report.
Similarly, the projection of agricultural growth was reduced from 2% to 1%, the growth of the services sector from 2.2 % to 1.3%, the 39; expansion of Brazilian consumption from 2.8% to 2.0% and investment increase from 4.0% to 3.5%.
"The increase in the level of uncertainty over the last few months has reduced the growth prospects for the Brazilian economy, as the country is run by the October elections The future economic policy and the effects of the recent truck strike have led the CNI to reduce all its projections, "said the Confederation.
In October, Brazil will experience the least predictable presidential elections of the last two decades in the country and in a climate of great radicalization.
Former President Luiz Inacio Lula da Silva, who is virtually disqualified for his imprisonment to serve a sentence of corruption, and far-right MP Jair Bolsonaro, A retired army captain defending the last military dictatorship in Brazil
"The main source of uncertainty that limits the growth of the economy is in the electoral scenario and its implications for the future of the country's economic policy, mainly because the main challenge is to reduce the historic public deficit, "according to the CNI.
While Lula defends the increase in public spending and the elimination of the measures that the current government has adopted to clean up the accounts, Bolsonaro admits that he understands nothing to the economy.
"Only the definition of the electoral scenario, and the announcement by the winner of a credible and effective economic adjustment program, will meet the positive expectations regarding the performance of the economy beyond 2018, "according to the analysis.
The Confederation also justified its pessimism by the still slow growth of the Brazilian economy this year after the deepest recessions of the last decades in Brazil.
The GDP of South America's largest economy declined by 3.5 % in 2015 and an equal percentage in 2016 and did not started to recover only in 2017, with a slight growth of 1, 0%, which also remained low in the first months of 2018.
"The causes of the loss of Intensity of recovery, in addition, go beyond domestic uncertainties. " ] The change in the international scenario also contributes to a less robust rate of growth ", ensures the employers.
According to the CNI, the tendency of the United States to raise their rates reduced international liquidity and caused the depreciation and volatility of emerging-country exchange rates, which, in turn, created an unfavorable environment in these countries that reflected in levels of growth.
"The new wave of protectionism, with the aggravation of trade tensions between major countries and the US trade war with Europe and China , is another disruptive element of the scenario, "adds the employers' association.
The CNI considers that with large closed markets, overruns of industrial products in major economies, pri especially in China, will inevitably go to emerging countries.
The report also warns of the huge negative effects on the Brazilian economy of the truckers' strike that paralyzed the country for eleven days in May and which caused a serious shortage crisis that forced industries to interrupt their production for several days.
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