The Brazilian service sector retreated 0.2 percent in February compared to January of this year, according to data released this Tuesday by the Brazilian Institute of Geography and Statistics (IBGE). The result is the second monthly negative rate in a row and indicates that the sector has been decelerating since the beginning of the year. In the first two months of 2022, the sector was down 2 percent.
February results came in below financial market expectations. Analysts consulted by Bloomberg, for example, projected a 0.7-percent increase for the month.
Even with the decline in February, the segment is still 5.4 percent above the pre-pandemic level of February 2020. However, “since August 2021, we have had five negative rates and only two positive ones; which gives the service sector a slower pace,” said Rodrigo Lobo, IBGE research manager.
The sector’s recovery has been threatened by the scenario of escalating inflation, higher interest rates, and weakened income. Analysts underline that, together, these factors reduce consumers’ purchasing power.