Brazilian retail sector has its worst August of this century

Retail sales in Brazil fell 3.1 percent in August from the previous month, per the Brazilian Institute of Geography and Statistics (IBGE). It was the worst result for the month since measurements began in 2000. Still, results in 2021 have remained 5.1 percent above the January-August period in 2020, but August’s negative results were the first dip after five months of growth.

Six of the eight categories surveyed by IBGE pulled numbers downward, especially personal and domestic use products (-16 percent), office equipment and supplies (-4.7 percent), and fuels (-2.4 percent).

Economists believe inflation and economic uncertainty were responsible for the weaker-than-expected performance. Markets had forecasted growth of at least 0.3 percent for August.

The disappointing retail output follows another negative result for Brazil’s economy. On Tuesday, IBGE recorded a 0.7-percent drop in industrial production between July and August. In six of the year’s first eight months, results were in the red — and the sector is currently producing 6 percent below December 2020 levels.