UPDATE 1-Brazil's retail sales rise unexpectedly in February
(Recast, adds analyst comment and broader index figure) BRASILIA, April 12 (Reuters) - Retail sales in Brazil rose unexpectedly in February on strong demand for supermarket items and furniture, government data showed on Tuesday in a surprising sign of life from an economy mired in a deep recession for more than a year. Retail sales volumes, excluding cars and building materials, rose a seasonally adjusted 1.2 percent in February from January , statistics agency IBGE said on Tuesday. Economists in a Reuters poll expected a decrease of 0.2 percent. Sales fell 4.2 percent from a year earlier, compared with expectations for a 5.9 percent drop in the Reuters poll. Supermarket and food sales, the most important component of IBGE's retail index, rose 0.8 percent in February and reversed all losses from the previous month. Furniture and home appliance sales increased 5.0 percent, following a 5.4 percent drop in January. "Despite the positive February print, the near-term outlook for private consumption and retail sales remains challenging," Alberto Ramos, head of Latin America economic research at Goldman Sachs, wrote in a note. He mentioned households' high indebtedness and rising taxes as some of the reasons for pessimism about longer-term consumption growth. Retail sales were down 5.3 percent in the 12 months through February as the recession drove up unemployment and sent consumer confidence to record lows. Economists and the central bank expect Brazil's economic output to shrink more than 3 percent in 2016 for its second straight annual decline, in the worst performance of any major world economy. A broader retail index that includes cars and building materials gained 1.8 percent in February from January, IBGE said. (Reporting by Silvio Cascione; Editing by Lisa Von Ahn)
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