Brazil Economy Expands for Fifth Straight Quarter

The Brazilian economy expanded for a fifth straight quarter, as expected, easing fears of a slowdown before a nationwide trucker protest roiled Latin America’s largest economy this month. This is while oil giant Petrobras workers have announced a 72-hour strike.

Brazil’s gross domestic product grew 0.4% from the prior three months, government statistics agency IBGE said on Wednesday, in line with the median estimate in a Reuters poll of economists. That followed a 0.2% upwardly revised pace of growth in the prior quarter, compared to the previously reported 0.1%. GDP rose 1.2% from the first quarter of 2017, slightly below a 1.3% consensus estimate.

Household spending continued to grow as record-low interest rates and low inflation bolstered consumers’ purchasing power. Capital spending also rose for a fourth straight quarter, although at a slower pace than in the two prior quarters amid uncertainty about October’s presidential election.

A Reuters poll last week showed most economists expected the economy to accelerate in coming quarters, turning the page on a deep recession that shaved nearly 8% off GDP in the 2015-16 period.

Yet that bullish view could come under question after a truckers protest over the past 10 days blocked major highways and hurt several main sectors of the economy.

With unemployment at double digits and companies grappling with widespread idle capacity, the economic recovery is unlikely to lift inflation, which is currently hovering below the central bank’s target range.

That should allow the bank to keep interest rates at all-time lows for a long time, according to economist forecasts, providing additional support to the economy.

Meanwhile, just as supplies and fuel were starting to trickle down to supermarkets and gas stations, after more than a week of protests from truck drivers in Brazil, the country woke up on Wednesday to a 72-hour strike, this time promoted by employees from one of Brazil’s largest companies, oil giant Petrobras.

Petrobras employees are protesting fuel price policies, Petrobras’ management and the high price of cooking gas and fuel to consumers

“We want to change (Petrobras President) Parente’s policy and take the privatization process out of Petrobras. We do not want to deepen the crisis. In this scenario, we will strike,” said the director of the Federation of Oil Workers, Simao Zanardi Filho.