Brazil Retail Sales Fall In July As Consumer Momentum Softens

(MENAFN- The Rio Times) Brazil released July retail sales data on September 11, showing a mixed picture for consumer demand. While annual growth improved, the monthly figures pointed to weaker short-term momentum.

Retail sales fell 0.3 percent month-on-month in July, matching expectations and extending June's 0.1 percent decline. The drop underscores pressure on household spending, as inflation and tighter financial conditions weigh on purchasing power.

On a yearly basis, sales rose 1.0 percent, accelerating from June's 0.4 percent and slightly above forecasts of 0.8 percent. The annual gain suggests some resilience in the consumer sector, though it remains modest compared with pre-pandemic norms.

Analysts note that July's increase likely reflects pockets of demand in services-linked retail and select durable goods, while core household items remain under pressure.

The figures follow August inflation data released earlier this week, which showed headline consumer prices easing to 5.13 percent year-on-year and slipping into negative territory month-on-month.



The cooling inflation backdrop offers potential relief to households and could support a gradual recovery in spending if price stability continues. Still, the combination of soft monthly sales and cautious annual growth highlights a fragile consumer environment.

Weak foreign exchange flows and global uncertainties further cloud the outlook, with investors closely watching whether the Central Bank of Brazil will have enough space to ease policy in the months ahead.

Markets are now focused on mid-September's IPCA-15 inflation update and broader economic activity indicators to gauge whether Brazil's consumer sector can regain momentum.

For now, the data confirm that while inflation is retreating, the recovery in household demand remains uneven and vulnerable to shocks.

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