April 12, 2016 / 1:02 PM / 2 years ago

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
    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
    "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

 (Reporting by Silvio Cascione; Editing by Lisa Von Ahn)
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