After slightly disappointing Q4 GDP figures, recently released national data indicate a positive start of the year for the Brazilian consumer. First, inflation remains below target, with the CPI increasing slightly by +0.32% m/m in February after +0.29% in January, in line with market expectations. On a y/y basis, inflation edged down to +2.84% from +2.86% in January. On the other hand, real retail sales advanced at their fastest monthly pace in January (+0.9% m/m) since June 2017. The retail sales index is now at its highest level since November 2015. Consumption developments should continue to be supported by employment gains (unemployment rate at 12.2%, down from a high of 13.6% in April 2017) and by a more accommodating monetary policy stance (policy rate at 6.75%, down from 14.25% in late 2016). Moreover, business confidence is back to its late 2013 level. Thus we expect the recovery of investment to continue in 2018, supporting the overall growth performance as well.