Brazilian retail sales plunged at a record pace in April as social isolation measures choked spending, official figures showed indicating the economy’s contraction in the second quarter could be even more severe than anticipated.
Sales excluding autos and construction materials fell 16.8% in April from March and from the same month a year ago, statistics agency IBGE said, reflecting the first full month of social isolation and quarantine measures.
Both were steeper than the 11.9% monthly decline and 13.6% annual fall forecast in a poll of economists. IBGE said that level of sales is now its lowest since the series began in 2000 and down 22.7% from the peak in October 2014
”Taken together with the industrial production figures, they point to a fall in overall economic activity of somewhere in the region of 15-20% in April,” said William Jackson, chief emerging market economist at Capital Economics.
“But just as importantly, the economy seems to be really slow to recover. Output probably remained at very depressed levels in May and June, pointing to a larger fall in GDP in Q2,” he said.
Brazil’s economy is expected to shrink at a record annual pace this year of more than 6%, with the second-quarter posting the biggest decline due to the coronavirus crisis.
The sectors hardest hit in April were clothing and footwear, which saw a 60.6% fall in sales; books, magazines and newspapers, which sank 43.4%; and other personal and domestic goods, which fell 29.5% on the month, IBGE said.
Supermarket, food, drink and tobacco sales fell 11.8%, and pharmacy, medical and cosmetics sales fell 17%, IBGE said.
On a wider measure, including autos and construction materials, retail sales in Latin America’s largest economy fell 17.5% on the month and 27.1% on the year, IBGE said. Both were record declines.