Itaú BBA - Retail sales fall in September

Macro Brazil

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Retail sales fall in September

November 13, 2018

Weak result may reflect a normalization after a month benefited by withdrawals from accounts held under PIS/PASEP programs.


For the version with all charts and tables, please open the attached pdf file 

Core retail sales fell 1.3% mom/sa in September, giving back the previous month’s gain, while disappointing the median of market expectations (stability) and our estimate (-0.6%). Normalization after a month benefited by withdrawals from accounts held under PIS/PASEP programs (social contributions by employers) is probably behind the reversal.

Broad retail sales (including vehicles and construction material) dropped 1.5% in September, also printing below the median of market expectations (-0.5%) and our call (-1.0%).

For the time being, we forecast a 0.5% increase in core retail sales and stable broad retail sales in October. Going forward, growth should pick up thanks to more expansive financial conditions. Importantly, such improvement hinges on the approval of reforms.

Artur Manoel Passos
Alexandre Gomes da Cunha

 

For the version with all charts and tables, please open the attached pdf file 



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