Brazil retail sales growth smallest in six years in 2022

Brazil retail sales growth smallest in six years in 2022

SAO PAULO (Reuters) – Retail sales volumes in Brazil posted in 2022 their smallest annual growth in six years, government statistics agency IBGE said on Thursday, providing further signs of a slowing economy amid tighter monetary conditions.

Sales fell by much more than expected in December, dragging the overall results further down to a tepid 1.0% growth in the full year, the lowest since the 6.2% drop seen amidst a severe economic crisis in 2016.

Still, yearly figures managed to remain in positive territory after a series of government stimulus measures ahead of the 2022 presidential election, avoiding further impacts from aggressive monetary tightening to tame high inflation.

“The result is very close to that of previous years – in 2021, for instance, there was an accumulated gain of 1.4%,” said IBGEs research manager Cristiano Santos.

“So it is a similar growth, although even more timid and very concentrated in the fuel and lubricants sector”.

In December, retail sales volumes fell 2.6% from November, well below expectations of a 0.7% drop in a Reuters poll of economists. On a yearly basis, they were up 0.4% in December, also missing market forecast of a 2.4% rise.

The fresh figures show that “spending on goods came under severe pressure in late fourth quarter,” said Pantheon Macroeconomics chief Latin America economist Andres Abadia, citing the tight conditions “and despite the resilience of the labor market and falling inflation”.