UPDATE 2-Brazil retail sales recover modestly in January

jueves 14 de marzo de 2013 15:23 CET

* Retail sales rise 0.6 pct from December

* Including cars and building materials, sales up 0.3 pct

By Silvio Cascione and Asher Levine

SAO PAULO, March 14 (Reuters) - Retail sales in Brazil expanded moderately in January, government data showed on Thursday, another sign of a gradual economic recovery in Latin America's largest economy.

Retail sales volumes rose 0.6 percent in January from December, topping the median forecast in a Reuters poll and recovering from a decline of 0.4 percent in December, statistics agency IBGE said.

Combined with strong manufacturing growth in January, the number suggests the Brazilian economy got a kick-start in 2013 after billions of dollars in tax cuts and subsidized lending by the government of President Dilma Rousseff.

"Despite the slight loss of momentum during the fourth quarter of 2012, the retail sector remains one of the most dynamic sectors in the economy," said Alberto Ramos, co-head of Goldman Sachs' Latin America economic research team.

However, details of the retail sales report reminded analysts about the fragility of the economic recovery. Including sales of automobiles and building materials, the so-called broad index rose 0.3 percent from December, down from a rise of 0.8 percent the previous month.

"Consumption didn't start the year with the type of intensity that the majority of analysts and the government itself expected. The data shows the recovery is still quite gradual," said Gustavo Mendonca, an economist with Saga Capital, in Rio de Janeiro. He said leading indicators point to a weaker month for industrial output in February.   Continuación...