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Aug 21

Brazil Retail and Consumer Market; More at Ease Despite Inflation - Zpryme

Zpryme Posted by: Zpryme in News Room  
Tagged in: Retail & Consumer , Brazil

Austin, TX (ZPRYME NEWS) – 08/21/08 – The retail markets and the consumer markets in Brazil seem to be more at ease than the rest of the countries which are bothered by inflation. According to Reuters on UPDATE 3 – Brazil inflation eases unexpectedly in June, there was an unexpected slowdown in the increases in prices of consumer products in Brazil.

IBGE statistics agency said that the consumer price index dropped from .79 percent in May to .74 percent in June. The same drop in the inflation rate though was lower than what was forecast by many economists who said that there would be a decline in the inflation rate of about 0.7 percent to about 0.92 percent. Likewise, it was revealed that the same slow down has benefited a bit some of the retail industries with an ease in price pressures on clothing items as well as personal spending. The report revealed that the clothing prices rose to .43 percent as compared to the increase of .98 in the month previous to June. Also, the personal spending cost inflation increase to .54 as compared to the increase of 1.11 percent the month previous to June.

According to MGI Studies, which compared Brazil’s performance to those of other sixteen countries, it revealed that sectors such as agriculture, automotive, food, government, home construction, retailing, retail banking, steel industry sector as well as the telecommunications sector all account for approximately thirty seven percent of the employment of Brazil and forty-six percent of its GDP. According to the study, the business market’s failure is mainly attributed to the country’s failure in its labor productivity growth which is definitely the determinant of the GDP of a nation.

In the same report, it can be gleaned that much can be done to improve the productivity of Brazil provided that Brazil is able to improve its informal sector, investment sectors and make public service delivery more efficient and regulatory constraints less stiff.

By

Mark Ishac & Zpryme: Emerging Markets Group

 

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