BRASILIA, June 8 (Xinhua) -- Brazil's biggest bank, Itau, on Friday downgraded its economic growth forecast for 2018 from 2 percent to 1.7 percent, citing the crippling truckers' strike in May and financial problems.
The bank also downgraded next year's forecast, from 2.8 percent to 2.5 percent.
The revised economic projections "take into account recent financial troubles and some impact of the strike on growth in 2018," the bank's chief economist Mario Mesquita said in a report.
The prolonged truckers' strike against rising fuel costs paralyzed deliveries and supplies for nearly 11 days, sparking shortages of fuel, fresh produce and other basic items.
The bank also criticized concessions the government made to the truckers in a bid to end the strike, including agreeing to lower fuel prices and taxes on fuel.
That measure is expected to cost the government 13.5 billion reals (3.55 billion U.S. dollars) in lost revenue and lead to eroded investor confidence in the economy, according to the financial markets.
"The concessions made by the government to end the strike have a fiscal impact, and paralyzing production, even temporarily, increases uncertainty in the economy. The consequence is lower confidence among consumers and business owners," said Mesquita.
The bank also adjusted its primary deficit projections for the year from 1.9 percent of gross domestic product (GDP) to 2.1 percent, and for 2019, from 1.2 percent to 1.4 percent.
