Key insights
- Brazilian retail sales exceeded expectations in March, reaching a record high. However, high borrowing costs and interest rates are still weighing on broader economic recovery. Brazil's central bank has been cutting interest rates, but tight credit conditions persist. This news has a slightly negative influence on US equities, signaling potential weakness in emerging market economies.
SAO PAULO, May 13 (Reuters) - Brazil’s retail sales volumes beat expectations and reached a record high in March, data from statistics agency IBGE showed on Wednesday, though high borrowing costs continue to restrain a broader recovery.
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Sales rose 0.5% in March from the previous month, while economists polled by Reuters had expected no changes
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It was the third consecutive monthly increase, with five of eight sectors posting gains
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Andres Abadia, chief Latin America economist at Pantheon Macroeconomics, said the recovery remains gradual rather than broad-based
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"Tight credit conditions and still-elevated interest rates continue to weigh on big-ticket purchases and cap the pace of expansion," he said
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Brazil’s central bank last month cut its benchmark interest rate by 25 basis points for a second straight meeting to 14.50%
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On an annual basis, retail sales rose 4.0% in March, well above expectations for a 2.75% increase in the Reuters poll