October 14, 20 - 1:16 pm - Reuters

Brazil’s service sector grows more than expected in August over July

The volume of the services sector in Brazil grew 2.9% in August over the previous month, at the third monthly increase, informed the Brazilian Institute of Geography and Statistics (IBGE) on Wednesday, in a record performance for the month, but still insufficient to recover the losses accumulated from February to May due to the pandemic.

In comparison with the same month last year, the indicator suffered the sixth consecutive fall, of 10%.

The performance of the sector, which accounts for about 60% of the country’s Gross Domestic Product (GDP), came a little better than the expectations of analysts who pointed 2.3% monthly increase and 10.7% annual decrease, according to a Reuters survey.

Nevertheless, in 12 months, the services sector accumulated a 5.3% drop, the strongest in the series, which started in December 2012. The accumulated increase since June, of 11.2%, was lower than the 19,8% losses recorded from February to May.

“We should not yet see in 2020 a recovery from losses caused by the pandemic,” IBGE research manager Rodrigo Lobo told reporters, adding that the sector is still 9.8% below February’s level.

Lobo pointed out that, even with measures to ease the restrictions on movement, displacement has not yet returned to normal levels, limiting the recovery of a sector that, even more than commerce and industry, depends to a great extent on face-to-face contact.

Translated by LABS