Retail sales in Brazil saw their first drop in nearly a decade, prompting concerns about a possible end to the South American country's retail boom. Indeed, retail sales contracted by 0,2% yoy in February, according to IBGE, the national statistics agency. Sales at supermarkets fell by 1% while those for personal and household items contracted by 2,9%.
Neil Shearing, Chief Emerging Markets Economist at Capital Economics, said he was optimistic that this number did not reflect real weakness, considering that February 2013 has one day less than February 2012 and that the data shown do not reflect, for example, the car sales, however he also commented that "the Brazilian boom seems to have run out of steam". A rise in inflation which began to grow from mid-2012 may have hurt consumption.
Inflation caused concern especially in March and April especially as it combined with a bad harvest and the increase in the prices of some primary goods. Tomatoes in particular, whose price has inflated threefold, have become the symbol of the population's discontent. Inflation reached 6,59% in March, rising above the benchmark set by the Brazilian central bank at 4,5%, with a margin of +2% and -2%.
Attachments: Rio Times Online
