Christmas should be the best of the Decade
O Estado de S. Paulo
This year's Christmas should be the best one of the decade. The real earnings of the retail in December this year, already discounting inflation, should get to R$ 91.9 billion (US$ 53.4 billion), according to the projections made by MB Associados based on the Retail Monthly Survey of the Brazilian Institute of Geography and Statistics (IBGE). The expected increase in sales for December, compared to the same month of 2008, is R$ 10.4 billion (US$ 6 billion). The figures are ten times bigger than the growth in the earnings of the stores registered in December of last year, which amounted to only R$ 978 million (US$ 534,4 million) compared to the previous year.
Tax benefits, such as the cut of the Excise Tax (IPI) for several sectors, such as cars, refrigerators, washing machines, construction materials and now furniture, combined with the increase in the salary of the public workers, the increase of the "Bolsa-Família (Family Stipend)" and the looser monetary policy, give support to the best Christmas season of the decade, explains Sergio Vale, the Chief Economist of the consulting firm who is responsible for the projection. "But the main factor for the increase of the consumption during Christmas is the tax policy", emphasizes the economist. "Everything will be sold this Christmas", foresees the economist of São Paulo Trade Association (ACSP), Emilio Alfieri. That means that after several Christmases buying inexpensive gifts this may also be the Christmas of the expensive presents.
The optimism in the Retail is not restricted to items that have benefited from the fall in the IPI rate and from easy payment conditions. Because of the increase in the level of employment and in the income, foods and beverages are on the list of products that will have big growth in sales this end of year.
According to Vale, from the MB, the heating of the consumption, which started in the middle of this year, should reach its peak in the second half of 2010. He projects that, in August next year, the increase in the sales of the retail accrued in 12 months should reach R$ 103 billion (US$ 59.9 billion), resuming the top level achieved in the mid-2008. For the Economist, this movement may bring inflation back sooner than imagined.