MercoPress. South Atlantic News Agency

Retail sales drop but use of credit cards grows in Brazil

Retail sales fell below Reuters' projections but credit and debit card transactions were on the rise

While according to Brazil's Insitute of Geography and Statistics (IBGE), retail sales fell below expectations in June, payments with credit and debit cards were on the rise, it was reported Wednesday.

Retail sales fell 1.4% in June from May, a steeper decline than the 1.0% forecast in a Reuters poll of economists. From a year earlier, sales posted a 0.3% decline, while economists expected them to be flat. In the first half of 2022, however, retail sales rose 1.4% compared with the same period a year earlier, according to the foreign agency. Seven of the eight activities surveyed contracted in June, led by the textile, apparel and footwear sector, which fell 5.4%. The only activity that grew compared to the previous month was pharmaceuticals, up 1.3%.

Meanwhile, Agencia Brasil reported that payments with credit and debit cards grew 36.5% in the first half of this year compared to the same period in 2021, according to a balance sheet released today (10) by the Brazilian Association of Credit Card Companies and Services (Abecs). It was moved R$ 1.6 trillion with cards in the first six months of 2022.

Credit cards had the biggest growth and also the highest turnover in the period. According to Abecs, R$ 1 trillion in payments were made funneled through this mechanism in the first semester of 2022, a 42.2% expansion from last year.

Debit cards accounted for R$ 488 billion in payments, an increase of 16.6% compared with the first six months of 2021, while prepaid cards had R$ 99.4 billion in transactions.

Remote purchases also grew in the first half of the year, with an increase of 32.7%, totaling R$ 338.5 billion.

Payments by credit and debit cards had an increase of 344.5%, totaling R$ 235.5 billion in the first six months of the year.

According to Abecs, the high growth is due to last year's poor comparison base, after a critical moment of the COVID-19 pandemic. Thus, the expansion also reflects the end of restrictions on movements and economic activities.