Brazil Retail Sales Rise 0.1% in May, Less Than Expected

Retail sales in Brazil grew more slowly than expected in May, with momentum decreasing amid persistent inflation, Reuters reported. The seasonally adjusted monthly increase of 0.1% in May from April was much less than the median forecast of 1.0% growth in a Reuters poll of economists. Government statistics agency IBGE said month-on-month sales were up in six of the eight categories surveyed in May, with the biggest impact coming from the 3.5% rise seen in pharmaceutical and medical goods. Sales fell 0.2% compared with May last year, IBGE said, versus a 2.6% increase forecast by economists. A broader measure of retail sales, including cars and building materials, showed growth of 0.2% in May versus April and this was down 0.7% compared with May last year, IBGE said. The performance comes amid tightening financial conditions and persistent inflation, which reached 11.89% in the 12 months through June. The central bank has already raised interest rates to 13.25% to dampen spiking consumer prices, signaling another hike for August and predicting a slowdown in economic activity from the year's second half onwards. Read more.