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Brazilian Companies Fear 2018 Already a 'Lost Year'

07/16/2018 - 11h46

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FLAVIA LIMA
JOANA CUNHA
ANAÏS FERNANDES
SÃO PAULO

Although economists see the poor indicators disclosed after the truck drivers' strike as something less disastrous that they had expected, their opinion is not shared by the so-called real economy.

Restaurant owners, wholesalers, retail dealers, and the industry have reviewed their projections for the end of the year as they believe that part of the losses they had after the strike cannot be recovered. They fear that the damage done to the reliability of businessmen and consumers will last for a long time.

The service sector, which closed the cycle of studies that assess the effects of the truck drivers' stoppage on the main sectors of the economy, declined by 3.8% in May in comparison to April - it is the worst performance since the figures were first recorded, in 2011.

The industry also fell to the level of 2003. "We feel very frustrated," says José Velloso, the executive president of the Brazilian Association of Machinery and Equipment.

Business owners in the neighborhood of Bom Retiro, São Paulo, an important fashion center which supplies retail sellers of the entire country, have conservative perspectives.

Their stocks are smaller as they believe that the coming months cannot bring big sales, says Nelson Tranquez, the president of the Bom Retiro Chamber of Shop Owners Directors.

In the retail market, the truckers' strike frustrated expectations of a recovery in sales which actually had already been losing momentum in the first quarter of the year.

"In April and May, we hoped that we would recover; however the truck drivers' strike made this recovery even slower and affected all the sectors - in addition to the Soccer World Cup, which has never been much of a support for commerce," says Luís Augusto Ildefonso, the president of Alshop (Association of Shopping Mall Stores).

For the second half of the year, the elections are seen as yet another element of instability. "They will raise uncertainty regarding consumption because the scenario is undefined; there is no expectation that one of the candidates might help the economy recover by carrying out the necessary reforms," says Ildefonso.

Translated by THOMAS MUELLO

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