The backbone of the Brazilian economy, the country’s services sector grew 3.7 percent in February in comparison to the previous month, bringing it above pre-pandemic levels for the first time. According to data from the Brazilian Institute of Geography and Statistics, the sector is up 24 percent in the past nine months, fully recovering the 18.6-percent loss suffered between March and May 2020.
February’s performance came far above the 1.5-percent growth expected by the market. However, these figures reflect a lower level of social isolation, as tougher restrictions were only reintroduced in the country as of March. As Nova Futura Investimentos economist Matheus Jaconeli warns, for the following months, “the services index may be heavily impacted by the new restrictions in place.”
On the other hand, the sector is still down 8.6 percent over the past 12 months, the worst performance on record. Several segments are still hemorrhaging revenue due to the pandemic, as is the case for lodging and restaurants.