Brazil's retail sales miss forecasts, fall for second straight month
Sales in Latin America's largest economy were down 0.2% in May from April, IBGE said, following a revised 0.3% decline in the previous month. Economists in a Reuters poll expected an increase of 0.2%.
IBGE researchers noted that not even Mother's Day, typically a boost for Brazil's retail sector, was enough to prevent the second straight monthly drop, which came after a strong start to 2025 that saw sales hit a record high in March.
Brazil's economy has been providing signs of cooling lately amid elevated borrowing costs. The central bank in June raised interest rates by 25 basis points to 15%, the highest since July 2006, in a bid to curb sticky inflation.
"The May retail sales report, in our opinion, underscores a period of a soft patch in economic activity throughout the second quarter," JPMorgan economists Vinicius Moreira and Cassiana Fernandez wrote in a note to clients.
Three of the eight core groups surveyed by IBGE - personal and household items, books and fuel - posted negative results in the month, the agency said.
On a year-over-year basis, sales grew 2.1% in May, compared to expectations for a 2.4% increase in the Reuters poll.
"Retail sales are clearly losing momentum," said Andres Abadia, chief Latin America economist at Pantheon Macroeconomics. "The data suggest the sector is no longer defying the drag from tighter financial conditions."
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