SAO PAULO, March 13 (Reuters) - Brazilian retail sales rose unexpectedly in January on strong demand for food, fuel and furniture, reinforcing expectations that the central bank will keep raising interest rates to contain inflationary pressures.
Sales volumes rose a seasonally adjusted 0.4 percent in January from December, government statistics agency IBGE said on Thursday, defying a median forecast of a 0.3 percent drop in a Reuters survey of 29 economists.
The rebound from a weak holiday season reinforced the robustness of household demand as Brazil’s unemployment rate remains near record lows. That has kept consumer prices rising faster than the central bank’s target for over three years.
Central bank chief Alexandre Tombini has led a push to raise the country’s benchmark lending rate by 350 basis points in the past year, and many expect another hike in April.
“This data makes us think the central bank will in fact carry out an increase of at least 25 basis points, and the possibility of another increase in May isn’t out of the question,” wrote Andre Perfeito, chief economist of Gradual Investimentos in a Thursday note.
Sales of fuel and home goods drove the retail expansion in January, but neither recovered fully from December’s drop. Supermarket sales extended three straight months of growth.
January’s retail sales jumped 6.2 percent from a year earlier, the IBGE added, more than the 4.6 percent median estimate in the Reuters poll. Forecasts ranged from a gain of 1.8 percent to a jump of 7.2 percent.