Brazil retail sales miss forecast in September, resume slowdown trend

SAO PAULO, Nov 13 (Reuters) - Retail sales volumes in Brazil fell 0.3% in September from August, data from government statistics agency IBGE showed on Thursday, missing expectations of a 0.3 increase in a Reuters poll.

The drop resumed a downward trend briefly interrupted in the previous reading, as high interest rates continue to weigh on consumption.

Year-on-year, sales rose 0.8%, marking a sixth consecutive annual gain, but well below the 2% increase forecast by economists.

Six out of eight sectors registered negative monthly readings in September, including fuels and supermarkets, IBGE said.

The latest figures reversed earlier signs of resilience and reinforced expectations that household spending will recover only gradually, according to chief LatAm Economist at Pantheon Macroeconomics Andres Abadia.

"We expect another weak performance in Q4, as suggested by leading indicators, though underlying conditions should improve gradually in H1 2026, supported by low inflation and monetary easing," he said.

Brazil's central bank last week kept the benchmark Selic rate steady for the third consecutive meeting at a near 20-year high, reinforcing its view that the current 15% rate is adequate to bring inflation back to target.

The bank aims for a 3% inflation plus or minus a margin of 1.5 percentage points.

On Wednesday, central bank chief Gabriel Galipolo said service inflation - a key metric closely watched because it is less exposed to international competition - remains largely inconsistent with the target.

(Reporting by Isabel Teles; Editing by Aida Pelaez-Fernandez)