Brazil August retail sales fall more than expected

BRASILIA: Brazilian retail sales volumes fell more than expected in August from the previous month, signaling consumer demand is ebbing as activity cools in Latin America's biggest economy.

Retail sales volumes in Brazil fell 0.4 percent in August from July, the government statistics agency IBGE said on Tuesday. In July, retail sales were downwardly revised to a 1.2 percent gain versus the preceding month.

The fall in retail sales volumes in August was the first since a 0.2 percent drop in April.

Retail sales had been expected to fall 0.05 percent, according to the median estimate of 16 economists polled by Reuters. Forecasts ranged from a fall of 0.70 percent to gains of 0.30 percent.

Retail sales boomed in 2010 as Brazilian shoppers helped the economy grow 7.5 percent, its fastest pace in 24 years, fueling the annual pace of inflation, now running at a six-year high.

Economists now see the central bank this year exceeding its annual inflation target ceiling of 6.5 percent.

That would be the first time inflation has failed to fall below an official target ceiling since 2003.

Demand-side indicators such as credit in Brazil have lagged supply data like industrial output, which has stagnated this year. The market estimates the economy would slow to around 3.5 percent this year.

August's retail sales rose 6.2 percent from the year-earlier period, the IBGE added, less than the 7 percent median estimate in the Reuters poll. Forecasts ranged from a gain of 6.04 percent to 7.7 percent.

Retail sales volumes, unlike total receipts via cash or credit cards, exclude inflation which could distort comparisons.

Copyright Reuters, 2011