Retail Sales in Brazil

SAO PAULO (Reuters) – Retail sales volumes in Brazil fell less than expected in August from July, as reported by the government statistics agency IBGE on Thursday.

Sales in Latin America's largest economy declined by 0.3% during this period, while economists polled by Reuters anticipated a decrease of 0.50%. In July, retail sales had risen by 0.6%.

The retail sector has provided a significant boost to economic activity in 2024, and the August figure represents only the second negative monthly reading this year, with June also seeing a drop.

According to IBGE, seven out of the eight sub-sectors surveyed reported month-on-month declines in August. The most considerable decrease came from personal and domestic use products, which fell by 3.9%.

Conversely, retail sales increased by 5.1% in August compared to the same period last year, exceeding expectations of a 3.60% rise in the Reuters poll.

In light of stronger-than-expected economic data, Brazil's central bank began an interest rate-hiking cycle last month, implementing a 25 basis-point increase to 10.75%, with indications of further tightening to come.