Brazil retail sales rose at record pace in May, suggesting economic rebound likely

SAO PAULO (Reuters) - Brazilian retail sales jumped at record pace in May, official figures showed on Wednesday, suggesting the economy could be on a recovery path as authorities gradually lift social isolation measures taken to curb the spread of the novel coronavirus.

Sales excluding autos and building materials in Brazil climbed 13.9% in May from April, statistics agency IBGE said, ending a two-month retraction that started in March, when lockdown and quarantine rules were put in place.

It was the fastest pace of growth since the beginning of the historical series in January 2000, and also higher than the 6% monthly rise forecast in a Reuters poll of economists.

On an annual basis, sales fell 7.2% in May, better than the 12.1% drop forecast in the Reuters poll.

All categories showed significant expansion in May, with fabrics, clothing and footwear emerging as the most positive highlight after a 100.6% sales rise compared with April, according to IBGE.

Furniture and home appliances sales rose 47.5%, while other personal and domestic goods soared 45.2% on a monthly basis, the survey showed.

Supermarket, food, drink and tobacco sales grew 7.1%, and pharmacy, medical and cosmetics sales climbed 10.3% in May from the previous month, IBGE said.

“The data reinforces the perspective that the month of April was in fact the worst moment in terms of activity for the Brazilian economy,” said Felipe Sichel, chief-strategist at Modalmais bank.

“Going forward, we expect the expansion of activity to continue in June in line with the relaxation of social isolation measures,” he added.

The numbers corroborate recent remarks by Brazilian Central Bank President Roberto Campos Neto that the country’s economy appears to be recovering quickly from the downturn caused by the coronavirus outbreak.

Reporting by Gabriela Mello; Editing by Bernadette Baum