Brazil Retail Sales Climb in April as Consumer Confidence Rises

Brazil’s retail sales rose in line with analysts’ expectation in April as consumer confidence rebounded and economists forecast Latin America’s largest economy may emerge from recession quicker than initially thought.

Sales rose 0.5 percent in April after a 0.9 percent drop the prior month, the national statistics agency said Wednesday. That was in line with the median estimate from 36 economists surveyed by Bloomberg. Sales plunged 6.7 percent in April versus the same month in 2015.

Consumer confidence is showing signs of potential rebound as annual inflation slows and economists improve their forecasts for economic growth. Even so, sentiment remains near historic lows with unemployment on the rise. In the first quarter Latin America’s largest economy shrank for the fifth straight period, dragged down by shrinking consumer spending in each.

Sales of food, beverages and tobacco products at hypermarkets and supermarkets rose 1 percent in April, after a 1.4 percent decline the prior month. Sales of apparel rose 3.7 percent.

Consumer spending in the first quarter contracted by 1.7 percent, the sector’s fifth straight decline, dragging the overall economy to fall 0.3 percent. Still, that was less than the median forecast from economists, who have since been boosting their calls.

Brazil’s economy contracted 3.8 percent in 2015 and economists surveyed by the central bank see it shrinking by less this year and resuming growth in 2017. Last week BNP Paribas revised its 2016 GDP forecast to a contraction of 3 percent, versus a prior forecast for a 4 percent decline. Itau Unibanco Holding SA also improved its forecast for 2016 GDP to a 3.5 percent contraction, from 4 percent previously.

Broad retail sales, which include cars, car parts, and construction materials, fell 1.4 percent from March, and 9.1 percent versus April last year, according to the statistics institute.

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