Brazil’s service sector grew in August against the tide

Brazil’s service sector grew 0.5 percent between July and August of this year, in what was the fifth-straight positive result according to official data. In this five-month period, growth reached 6.5 percent, pushing the sector 4.6 percent above pre-pandemic levels and to its highest point since November 2015.

The numbers contrast with negative results for retail and industrial sectors, amid an uncertain economic scenario in Brazil. The country faces high unemployment and inflation rates, political turmoil, and a looming energy crisis.

In the 12-month period, services have maintained a growth trajectory that began in February. In August, results were driven by four of the five surveyed segments, led by services to families (4.1 percent). Information and communication (1.2 percent) and transport (1.1 percent) came next, after posting negative results in July.

“Recovery comes as vaccine rollouts advance and people’s mobility increases. Since June of last year, the service sector has accumulated 14 months of positive growth — with March 2021 being the sole exception,” said Rodrigo Lobo, responsible for the survey. “In that month, non-essential businesses were closed by local governments as Brazil faced a second Covid wave.”