Brazil’s Retail Sales Signal Rise in Spending by Poor
Wednesday, September 19, 2007
Brazilian families in the impoverished northern states are increasing purchases of consumer goods faster than the national average, signaling government handouts are fueling growth in the region. Sept. 19 (Bloomberg) — Brazilian families in the impoverished northern states are increasing purchases of consumer goods faster than the national average, signaling government handouts are fueling growth in the region.
Retail sales in Maranhao, the poorest state by per capita gross domestic product, climbed 16.1 percent in the 12 months through July, compared with the 8.7 percent national average, according to national statistics agency data released yesterday.
Since taking office in 2003, Lula, who has pledged to spur growth to 5 percent annually, has increased cash handouts for the poor, raised the minimum wage and boosted state pensions. About 60 percent of the beneficiaries of the handouts, called the Bolsa Familia in Portuguese, live in the north and northeastern regions.
’Social programs haven’t only achieved the goal of poverty reduction, but are also contributing to economic growth,’’ Arlete Sampaio, deputy undersecretary of the Social Development Ministry, said in a telephone interview from Brasilia. “They are helping build a domestic market.’
Retail sales in the northeastern states climbed 11 percent, while sales grew 13.5 percent in the northern region. Of the country’s five regions, the midwest has the slowest growth rate with retail sales up 6.2 percent.
’It would be an exaggeration to say 100 percent of the increased demand is led by cash handouts, but they are a relevant reason to explain the retail sales performance,’ Alexandre Andrade, an economist at Tendencias Consultoria in Sao Paulo, said.
Brazil’s poverty rate fell to 38 percent in 2006 from 45.9 percent in 2003, Sampaio said, referring to a report released by the national statistics agency.
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