* 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 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.
After two disappointing years, Brazil's economy is expected
to grow about 3 percent in 2013. However, rising inflation has
prompted concerns that the central bank may raise interest rates
later this year from a current record-low.
The central bank should release its IBC-Br index
of economic activity on Friday, though the release date has not
been confirmed. Preliminary estimates taken before the retail
sales data projected an increase of 0.9 percent from December.
In January, retail sales volumes expanded in six of eight
retail categories. Supermarket, food, beverage and tobacco
purchases - the largest category in the IBGE report - rose 1.4
percent from December, supported by rising wages and job
stability, IBGE said.
January's retail sales climbed 5.9 percent from a year
earlier, the IBGE added, more than the 5.5 percent
median estimate in the Reuters poll. Forecasts ranged from a
gain of 4.0 percent to 10.2 percent.