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Brazil Retail Sales Drop Most On Record, Goldman Warns Will Get Worse
Just a few months ago, we warned Brazil's economy was on the verge of collapse as the fiscal situation was deteriorating rapidly. It appears, judging by the most recent data from the oil-rich nation, that we were right. Broad retail sales have now declined for five consecutive months with the seasonally adjusted broad retail sales index now at the same level as early 2012. Core retail sales declined 3.5% YoY during April (weakest print since Aug 2003) and broad retail sales declined by an even larger 8.5% YoY (lowest on record), and as Goldman warns, the outlook for private consumption and retail sales in the near term remains very weak.
Via Goldman Sachs,
BOTTOM LINE:
The core retail sales measure (excluding autos and building materials) missed market consensus (+0.7% mom sa) by surprisingly contracting 0.4% (mom sa) in April. In addition, the March figure was revised slightly down from -0.9% mom sa to -1.0% mom sa. Similarly, broad retail sales contracted 0.3% mom sa in April, and the March figure was revised down from -1.6% mom sa to -1.8% mom sa.
Broad retail sales have now declined for five consecutive months at an average monthly rate of 1.6% mom sa per month. The seasonally adjusted broad retail sales index is now at the same level as early 2012.
In annual terms, core retail sales declined 3.5% yoy during April (weakest print since Aug 2003) and broad retail sales declined by an even larger 8.5% yoy.
Given the weak April print the carry-over for sequential 2Q2015 growth is now at a very weak -1.2% qoq sa for core, and -1.9% qoq sa for broad retail sales.
The outlook for private consumption and retail sales in the near term remains very weak owing to moderating credit flows by both private and public banks, high levels of household indebtedness, decelerating job creation and real wage growth, rising interest rates, higher taxes, higher utility and transportation tariffs, and very depressed consumer confidence.
KEY NUMBERS (April):
Core/Control Retail sales: -0.4% mom sa (-3.5% yoy) versus consensus forecast of +0.7% and GS forecast of +0.8%.
Broad retail sales: -0.3% mom sa (-8.5% yoy) versus consensus forecast of -0.5% and GS forecast of +0.2%.
MAIN POINTS:
- Core/control retail sales (excludes autos and building materials) surprisingly contracted 0.4% mom sa in June (consensus expectations were for a 0.7% increase).
- The decline of (core) retail activity in April was driven by weak prints in office and communication equipment (-12.2% mom sa), clothing & footwear (-3.8% mom sa), furniture and appliances (-3.1% mom sa), and other articles of personal and domestic use (-5.1% mom sa).
- Broad retail sales contracted 0.3% mom sa in April, and the February figure was revised down to -1.8% mom sa from the original -1.6% mom sa. The sale of building materials declined 1.2% mom sa April (fourth consecutive monthly decline), while sales of autos and autoparts expanded 4.4% mom sa (partly offsetting the -5.2% mom sa variation seen in March).
* * *
As we noted previously, in short - the entire economy is now on the verge of total collapse. This is what happened in a few bullet points:
- The fiscal picture has deteriorated very sharply since 2011 at both the flow (fiscal deficit) and stock (gross public debt) levels. The primary and overall nominal fiscal surpluses at year-end 2014 were at levels last seen in the late 1990s.
- The steady decline of the public sector savings rate is leading to a wider current account deficit despite weaker growth and low investment. In fact, the twin fiscal and current account deficits are now tracking at a combined, very troublesome 10.9% of GDP, the worst picture in 15 years (since August 1999). Repairing the severely unbalanced macro picture would require a deep, structural and permanent fiscal and quasi-fiscal adjustment and a significantly weaker BRL.
- The new economic team faces, among other things, the very significant challenge of repairing the severely deteriorated fiscal picture.
- The steady erosion of the fiscal stance pushed net and gross public debt up. Furthermore, fiscal and quasi-fiscal activism undermined the effectiveness of monetary policy, contributed to keep inflation very high and drove the current account deficit to a very high level despite weak growth.
Good Luck Brazil.. and so much for BRICS-based global growth...
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Meh...... Who needs sales when the printing presses go up to eleven?
Edit, speaking of South American countries.. It appears the Pope is calling for a new global authority to "tackle climate change"
http://www.theguardian.com/world/2015/jun/15/pope-francis-destruction-ec...
I've always been skeptical about the last pope bullshit, but sometimes I wonder.
Well, I guess the NWO finally got a Pope they could really work with.
Listening to the Pope on global warming is like listening to Obama talk about the economy. Neither has the slightest clue what they fuck they're talking about.
I have no real use for the Catholic Church but the old German Pope was pushed out. This Argentinian one is a real douchebag.
Regardless one's use for the "Church" (Which I completely comprehend, BTW, not saying I have no use, but comprehend) it is the Oldest, Largest, Richest and Most Influential Political organization on Earth.
Look into my Bankster's Crystal Ball, where you will find POVERTY FOR THE WORLD, & record profits for the banks...
what do you expect from a fucking Jesuit...
Hookers and blo will get their numbers up.
With what's happening to crude, It's all they've got.
Not to worry - US retail sales can be seasonally adjusted a hundred times till the numbers come up as the Fed wants them.
We're an empire now, and when we act, we create our own reality
Just look at how we fix inflation:
Chapwood Index shows real inflation in US.
In 2014, it was 9.7% - 1212% of official US inflation (0.8%)
http://www.chapwoodindex.com/
US exceptionalism is always backed by exceptional fraud and lies.
yeah, except no one cares because this article is about Brazil, not the US...
when I drive by guys collecting rats out of the trash piles on my way to an airport in the US (like I observed when I was on my way to GRU in Sao Paulo last week), then I'll worry about whateverthefuck... but, until then... it's about Brazil...
In NYC we're all about keeping up appearances so we confine our rat-hunting to post-midnight and pre-dawn dumpster diving. This way our betters can't become offended seeing how we debase ourselves.
lol idiot it does not matter if he post it here or somewhere else it will not change the truth about ussa inflation and failing economy bust .
Goldman.....doing satan's work. Too bad the sheeple have not figured that part yet.
Sheeple = sheep who identify themselves as people
BRICs bailing out Greece aaaaany minute now...
Somebody fetch me my fork.
Another country's economy destroyed and set up for tyranny.
A great Socialist triumph!!!
Well then, the "good folks" at GS had better start spending their ill-gotten gains in a fucking hurry!!!
God's work is never done...
I saw a lot of Listings for Brazil Real Estate over the last 3 years or so for international investors.
I wonder if the Market will offer up some great deals next year or two. A lot of the stuff is new builds along the coasts.
hold out, it's due to get cheaper...
Blame it on the weather.
Ah yes, for Earth's population just all of a sudden, "got a chill"
Goldman Warns Will Get Worse = they are buying up Brazil
So its RICS now.
"GAP" store will close 175 store so much for recovery...
Olympics not coming to the rescue? People not buying TVs already?
Futbol!
So, yeah...their overnight rate is a very Russian-esque 12% give or take.
I'm no sure why their currency is getting annihilated like the ruble was/is again.
Meanwhile in inflation loving America...
Isn't the U.S. having a similar slump of retail sales? Can't wait for the after party. See you all at the bottom. At least Brazilian women are good looking so they got that going on.
More stimulus is needed Scotty....
Has to be the 'cold weather.' The Yanamomo Amazonian Indians hate cold weather.
It's a scientific fact.
I would advise Brasil to build more Termas...
Termas?
"...retail sales have now declined for five consecutive months with the seasonally adjusted broad retail sales index now at the same level as early 2012."
This is not a problem for Brazil's retail sector. They'll do what they always do when business is slack: raise prices to maintain revenue levels. If necessary, raise import taxes even higher to keep competition out.
And when all that causes inflation (as it already has), they'll just raise prices again.
Rinse and Repeat.
Socialist policies and deficit budgets destroy yet another promising economy.