Retail sales in Brazil declining at rapid pace
2023.01.12 07:50
Retail sales in Brazil declining at rapid pace
By Tiffany Smith
Budrigannews.com – The government statistics agency IBGE reported on Wednesday that Brazil’s retail sales volumes experienced their biggest drop in five months in November. This was caused by higher fuel prices and a weak Black Friday performance last year.
IBGE reported that Brazil’s retail sales decreased by 0.6% in November compared to October. This was a deeper decline than the 0.3% expected by economists polled by Reuters and the first reading that was negative since July.
Research manager Cristiano Santos said in a statement that the most recent data came in at a time when Brazil’s consumption is slowing down due to a lack of credit growth, higher interest rates, and rising consumer prices.
Santos stated, “After a deflation series started in July last year, November was the first month in which fuel prices were back on the rise, and that affected companies’ revenues.”
He went on to say, “A weaker performance during Black Friday also contributed heavily to the negative reading,” pointing out that sales of office supplies and equipment, which typically rise during this time, fell in November.
Retail sales in the largest economy in Latin America increased by 1% annually in November, falling short of market expectations of 1.9 percent.
That means that the industry is still 3.6% below a peak that was reported in November 2020, but it is 2.6% higher than it was before the pandemic.
According to economists working for JPMorgan (NYSE:), “Retail sales have been volatile recently, with a weak performance in the third quarter, a recovery during the beginning of the fourth quarter, and a partial reversal of this recovery in today’s November retail sales report.” said.
According to Andres Abadia, Pantheon Macroeconomics’ chief Latin America economist, recent news of an extension of temporary tax exemptions on fuels should support the sector in the very near future, supporting his relatively optimistic outlook for the first quarter as a whole.
Abadia went on to say, “However, growth momentum likely will ease sequentially as the year progresses, due to the lagged effect of tight financial conditions.”
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