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A young, fast growing population of 210 million persons who have the benefit of rapidly increasing purchasing power makes the case for a strong medium term outlook. As its GDP grows, Brazil is undergoing swift urban development and its affluent, better educated middle class is changing its spending habits as it can increasingly afford them.
In addition, high employment helps drive strong consumption, a prime mover of overall growth. The central bank has been concerned about accelerating price trends but as the economy has slowed in 2011 (2.7% GDP growth), it has cut interest rates several times and it is expected to continue, supporting further growth in consumption. The January retail sales figures showed heady advance (2.6% m/m) led by higher wages and salaries....
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