Brazil retail sales up 0.1% in April driven by Easter

10:13 am Wednesday, June 14th, 2023

SAO PAULO (Reuters) – Retail sales in Brazil rose for the second consecutive month in April driven by Easter sales, data from government statistics agency IBGE showed on Wednesday, but that was still not enough for them to meet market expectations.

Sales increased 0.1% in the month compared with March, IBGE said in a report, boosted by supermarket shopping but slightly below consensus of 0.3% from economists polled by Reuters, as growth lost steam from the previous month.

“Retail sales remain resilient, but tight financial conditions are preventing a stronger recovery,” Pantheon Macroeconomics’ chief economist for Latin America, Andres Abadia, said in a note to clients.

Business leaders in the sector have been joining calls from President Luiz Inacio Lula da Silva for the central bank to lower interest rates from their current cycle-high of 13.75% after inflation reached its lowest in more than two years.

Luiza Trajano, who chairs the board of retail giant Magazine Luiza, directly asked central bank Governor Roberto Campos Neto at an event earlier this week for a sign that rates will be lowered.

Campos Neto indicated that an improvement in market conditions was paving the way for a shift in monetary policy.

The monthly growth in sales, IBGE said, came on the back of three of the eight segments surveyed, with supermarkets and food products posting the biggest rise because of strong Easter sales.

The agency highlighted April was the fourth consecutive month with no negative results, including zero growth reported in February, with the key indicator having jumped 1.9% so far this year.

On a yearly basis, retail sales increased 0.5% in April, below an expected 0.95% rise.

“The last few months have shown some resilience,” C6 economist Claudia Moreno said. “But we maintain our forecast of a slowdown ahead, as high interest rates and the global economic slowdown should continue to impact retail performance.”

(Reporting by Camila Moreira and Gabriel Araujo; Editing by Steven Grattan and Nick Zieminski)