Brazil: Retail sales plummeted in May, data points to downside risks for GDP growth - Rabobank

According to analysts from Rabobank, incoming data in Brazil continues to highlight downside risks for GDP growth in Q2 and full-year. 

Key Quotes: 

“On the heels of a major stoppage in Brazil’s transportation system in the end of May, headline retail sales temporarily plummeted 4.9% m/m (+2.2% y/y) for that month.  Despite a visible softening recently – owing to fading effects from one-off factors that boosted consumption in 2017 – the (six-month) trends of retail sales gauges remain in growth territory (e.g. broad sales rising at annual sequential speed of 3.7%).”

“With coincident retail indicators for June confirming a rebound in the makings, we see a good likelihood that broad retail sales will post a positive quarterly sequential growth in Q2.”

“Consumer spending is certainly not as “red-hot” as some analysts had been predicting a few months ago, but it continues to advance on more constructive, gradually improving fundamentals (e.g. healing job market, lower household indebtedness, less economic distrust). In any case, with the (hard-measuring) impact from May’s transportation stoppage still being felt, the incoming data for the short term continues to highlight the asymmetrically distributed risks for GDP growth in Q2 and full-year. For now, we project 0.2% q/q for the former and 1.6% for the latter.”
 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.