RIO DE JANEIRO, June 28 -- Brazil's Central Bank reduced its economic growth projection on Thursday, revising the country's 2.6 percent GDP growth expectation down to 1.6 percent.
According to the Central Bank's report, the reduction is associated with "the cooling of economic activity at the start of this year."
The new projection follows the same line taken by the Brazilian government and the country's financial market.
The government recently reduced its GDP expansion forecast down to 2.5 percent from 2.97, while the markets on Monday lowered their projection for the seventh week running. Now set at 1.55 percent, the estimation has almost halved from the 3 percent predicted in January.
The reduction in growth was accompanied by the increase in the Central Bank's inflation projection. Blamed on the national truck drivers' strike at the end of May, which caused food shortages around the country, projected inflation has risen from 3.8 percent to 4.2 for this year. However, the year 2019's rate was reduced from 4.1 to 3.7 percent.
The announcement comes only a few days after the renowned Brazilian think tank and educational institution, the Getulio Vargas Foundation, published a report detailing the 4.8 point drop in consumer confidence in June from May in the country.
The foundation suggested that negative perceptions about the job market added to the destabilization caused by May's strike.
Brazilian growth forecasts have been reduced in the last few months following a slower than expected recovery following the economic crisis of 2017 and 2016. The crisis saw the country's GDP drop 7 points and led to unemployment rates of 13.6 percent.