© Reuters. FILE PHOTO: A salesman is seen at his vegetable stand at the supply centre (CEASA) in Brasilia, Brazil May 9, 2023. REUTERS/Adriano Machado

SAO PAULO (Reuters) -Brazil’s retail sales fell in May and missed expectations, government statistics agency IBGE showed on Friday, as half of the segments presented a decline for the month.

Sales dropped 1.0% in May compared with the previous month, missing expectations of a 0.0% increase from economists polled by Reuters. The indicator also decreased 1.0% on a yearly basis in the month, below an expected 1.95% rise, marking the first drop in nine months.

The monthly decrease in sales, IBGE said, came on the back of four positive results of the eight segments surveyed, with pharmaceutical products and books, newspapers, magazines and stationery posting the biggest rise.

The agency highlighted the key indicator has jumped 1.3% so far this year.

Activities more linked to demand are weakening, an expected move given the environment of “scarce credit and high levels of household indebtedness,” said senior economist at Inter bank Andre Cordeiro.

The result reflects that lower inflation, the boost from the Brazilian real rebound, and government cash transfers are “no longer offsetting the drag from tighter financial conditions at the headline level,” Pantheon Macroeconomics’ chief economist for Latin America, Andres Abadia, said in a note to clients.

Source link