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BRASILIA, Oct 8 (Reuters) – Brazilian retail sales rose to their highest on record in August, official figures showed on Thursday, the fourth monthly increase in a row as economic activity continued to recover from the worst of the nationwide lockdown measures earlier this year.

The 3.4% rise from July was more than the 3.1% median forecast in a Reuters poll of economists, and lifted the total seasonally adjusted volume of sales beyond the previous all-time high of October 2014, according to statistics agency IBGE.

While policymakers will welcome the new record, momentum is slowing. July’s increase of 5.2% was revised down to 5.0%, and August’s rise was easily the smallest of the four consecutive monthly increases.

Retail sales excluding autos and construction materials rose 6.1% in August compared with the same month last year, IBGE said, less than 7.0% rise economists in the Reuters poll had expected.

Alberto Ramos, head of Latin American research at Goldman Sachs, noted that the strong recovery since April has been supported by large government transfers to millions of low-income families and a gradual relaxation of lockdown measures.

“However, a still very complex domestic covid viral picture and the likely reduction of fiscal stimulus before the end of the year could weaken the pace of the recovery,” he said.

Five of the eight sectors covered by IBGE showed a rise in sales. Fabric, clothing and footwear rose 30.5% on the month, other personal and domestic goods rose 10.4%, and furniture and household electrical goods rose 4.6%, IBGE said.

Sales are still down 0.9% so far this year, and up only 0.5% over the past 12 months, IBGE said.

On a wider basis, including cars and building materials, retail sales rose 4.6% in August from the previous month and 3.9% from August 2019, IBGE said.

Sales are now back above pre-pandemic levels from February, but in the first eight months of this year were still down 5.0%, and the overall sales volume index is still 4% below its August 2012 peak.

Reporting by Jamie McGeever Editing by Nick Zieminski and Steve Orlofsky

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