SAO PAULO (Reuters) - A nationwide protest by Brazilian truckers was slow to unwind on Monday, even after the week-long demonstrations against diesel price hikes got the government to cave to their demands, causing stocks and the currency to slide.
Brazilian truckers association Abcam, which says it represents at least 600,000 independent truck drivers, called on members to stand down, but warned that unwinding protests would take time.
“We are working to spread the word of a deal to all the drivers,” Abcam said in a written statement. “It is worth remembering that even though we are calling for an end to the blockades, not all protesters agree with that.”
By Monday night, most of the country had not returned to any semblance of normality.
The truckers’ protest left South America’s biggest city and economic hub Sao Paulo, and hundreds of communities across the country, without fuel, emptying normally gridlocked roads. Hospitals said they were running out of supplies.
Schools cancelled classes, businesses told employees to work from home and virtually every part of the powerhouse agribusiness sector said the damage was massive, if not yet quantifiable.
In a televised Sunday night address, President Michel Temer said he signed three decrees with immediate effect to address the main demands of truck drivers, adding that “we gave everything they asked for.”
One of the decrees cuts the price of diesel at the pump by 12 percent for 60 days, another ordered toll operators across the country not to charge for rear axles that are not in use and another mandates the minimum fare paid to truckers for freight.
Finance Minister Eduardo Guardia said on Monday that the measures Temer announced will cost 9.5 billion reais (1.91 billion pounds), of which 3.8 billion will come from cutting government expenses.
The benchmark Bovespa stock index .BVSP dropped 4.5 percent, sliding into negative territory for the first time this year. Leading the losses was a nearly 15 percent plunge by Petroleo Brasileiro SA (PETR4.SA) due to investor concerns about political interference in the state-led oil company's fuel pricing policy.
Brazil’s currency also lost about 1.6 percent on Monday against the U.S. dollar on concerns about further pressure on the government’s gaping fiscal deficit.
“The market is focused on the fiscal problem, with the impact the government’s actions will have on public accounts,” said Fernando Bergallo, head of currency at FB Capital.
Guardia acknowledged that the truckers’ protests would have a “relevant” impact on this year’s gross domestic product.
In the central bank’s weekly survey released Monday, economists polled revised their economic growth forecasts to 2.37 percent growth in 2018, down from a median forecast of 2.5 percent the week before.
In a sign of the uncertainty of how or when the protest may wind down, one of the leaders of independent truckers in Rio de Janeiro, Vicente Reis, said that drivers were not happy with what Temer offered.
“We are not satisfied with what was offered, nor even with who was negotiating,” Reis said. “Our goal is no longer just a cut in diesel prices. We won the support of society and now we want a reduction in the costs of other fuels.”
Reporting by Raquel Stenzel, Alberto Alerigi, Camila Moreira, Tatiana Bautzer and Claudia Violante in Sao Paulo; Marcela Ayres, Lisandra Paraguassu and Bruno Federowski in Brasilia; and Rodrigo Viga Gaier in Rio de Janeiro; Writing by Brad Brooks; Editing by James Dalgleish and Diane Craft