Brazil Retail March 2017

Brazil

Brazil: Retail sales plunge in March

May 11, 2017

Retail sales (excluding cars and construction) in Brazil plummeted in March, falling at the sharpest pace in over two years. Sales fell 1.9% from the previous month in seasonally-adjusted terms, a more pronounced contraction than February’s revised 1.6% decrease (previously reported: -0.2% month-on-month) and then market analysts had expected. The IBGE has been making frequent revisions to data due to a change in base year in recent months, complicating efforts to analyze Brazil’s economic momentum. Overall, although the country’s deep recession has past rock bottom, the result suggests that household spending is meagre in the face of high unemployment.

Looking at March’s result in detail, contractions were recorded in four of the eight components of the index. The monthly drop was driven largely by a steep decline in sales of food, beverages and tobacco, the most significant category of the index.

On an annual basis, retail sales decreased 4.0% in March, which was a deterioration from February’s 3.7% decline. Despite the poor result, the trend inched up as the annual average variation in retail sales rose from minus 5.4% to minus 5.3%, an over one-year high.

Panelists participating in this month’s LatinFocus Consensus Forecast expect retail sales to decrease 0.1% in 2017, which is unchanged from last month’s forecast. For 2018, the panel sees retail sales growing 2.5%.


Author: Angela Bouzanis, Senior Economist

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Brazil Retail March 2017

Note: Month-on-month changes of seasonally-adjusted retail sales and annual average growth rate in %.
Source: Brazilian Institute of Statistics and Geography (IBGE) and FocusEconomics Consensus Forecast.


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