Brazil's Clothing Prices Rise 3.25% as Retail Sales Fall

Brazil’s Clothing Prices Rise 3.25% as Retail Sales Fall

Clothing prices in Brazil rose 3.25% year-on-year in August, according to the country’s official statistics agency, IBGE. The figure, which forms part of the broad IPCA consumer price index, represents a slowdown from July’s 3.87% increase and keeps clothing inflation comfortably below the headline rate. Overall IPCA inflation eased to 4.22%, down from 4.44% a month earlier.

On a monthly basis, clothing prices edged up 0.12%, while the all-items index fell 0.32%.

What’s driving the numbers?

Within the clothing group, the details reveal divergent trends. Prices for clothes rose 1.47% year-on-year, with menswear up 1.97%, womenswear up 0.79% and childrenswear up 2.05%. Footwear and accessories saw a steeper increase of 5.75%, driven by trainers, which rose 6.74%. The most eye-catching jump came from jewellery and costume jewellery, where prices surged 13.55%.

These figures suggest that while clothing inflation has moderated, certain segments – particularly accessories and jewellery – are experiencing much stronger price pressures.

Retail sales continue to slide

The latest IBGE retail data, covering July, paint a challenging picture for the apparel sector. Sales volume in the textiles, apparel and footwear activity group fell 4.7% year-on-year, following a 1.7% decline in June. On a seasonally adjusted basis, volume dropped 2.7% from June, after a 3.2% fall the previous month.

In nominal terms, textiles, apparel and footwear sales were down 2.0% year-on-year in July. Total retail sales volume, by contrast, rose 1.2% year-on-year but slipped 0.8% from June on a seasonally adjusted basis. For the year to July, textiles, apparel and footwear sales volume was 0.9% lower than in the same period a year earlier.

Consumer confidence takes a hit

Household sentiment weakened further in August. The consumer confidence index from the Getulio Vargas Foundation (FGV) fell 3.6 points to 84.7, its fourth consecutive monthly decline. The expectations index dropped 5.4 points to 86.1, while the indicator of planned purchases of durable goods plunged 10.0 points to 74.7. FGV’s commerce confidence index also fell 1.3 points to 84.2, with its expected-sales component down 2.6 points to 85.6.

Monetary policy and currency

On 5 August, the Monetary Policy Committee (Copom) of Banco Central do Brasil cut the Selic benchmark rate by 25 basis points to 14.00%. The dollar averaged 5.1532 reais in August, up from 5.1139 reais in July, according to the BCB’s PTAX reference rate. That represents a 0.8% depreciation of the real against the dollar over the month. Compared with August 2025, when the dollar averaged 5.4469 reais, the real was 5.7% stronger.

Macro backdrop

Brazil’s unemployment rate held steady at 5.3% in the three months to August, unchanged from the three months to July and down from 5.6% a year earlier, IBGE reported.

The bottom line

Brazilian clothing prices rose 3.25% year-on-year in August, below headline IPCA inflation of 4.22%. The most recent IBGE retail data, for July, show textiles, apparel and footwear sales volume down 4.7% year-on-year. Consumer confidence fell to 84.7 in August, with planned durable-goods purchases down 10.0 points, while Copom cut the Selic rate to 14.00%.

Note: this article combines the most recent official data available at the time of writing. Reporting lags differ by indicator, so not all figures refer to the same month. Each data point is labelled with its reference period.