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Retail sales in Brazil rise.

According to a Brazilian analyst quoted in a March 21, 2006 Bloomberg News service release, "A boom in lending and a tighter labor market are bankrolling consumption." And an impressive bankroll it is. January 2006 retail sales increased 6.5 percent compared with a 4.9 percent increase in December 2005. Bloomberg says the measures are based on units sold.

Interest rate reductions were credited with stimulating consumer spending. The government has reduced interest rates six times in the past year.

Spending appeared to be broadly based. Bloomberg quoted an executive from a major consumer goods manufacturer who said that his company noted a surge in spending for personal care and household goods (according to Brazil's official statistics agency the surge was quite significant, 26 percent in January 2006).

Other product categories posting favorable increases were food beverages and tobacco, which increased 4 percent in January 2006 compared with 0.8 percent in December 2005 and an increase of 1.4 percent in November 2005. Sales of home appliances rose 12.6 percent in January 2006, 9.4 percent in December 2005, and 14.5 percent in November 2005. The fact that these consumer durables are rising so dramatically is a sign that Brazil's consumers will contribute significantly to GDP growth.
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Publication:Market Latin America
Article Type:Brief article
Geographic Code:3BRAZ
Date:Apr 1, 2006
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