Brazilian services sector hits an eight-year peak

Services output, an important and closely watched measure of economic activity, expanded during the month of July. Per data released on Tuesday by the national statistics institute IBGE, the sector notched a 1.1-percent bump. Services output now sits 8.9 percent above pre-pandemic levels and at its highest point since November 2014.

“This growth resumption is quite significant and anchored in services for companies, such as information technology and cargo transport,” said Rodrigo Lobo, the survey’s manager. 

The transportation segment grew 2.3 percent in July. 

Cargo transportation, which has accumulated a rise of almost 20 percent since October of last year, rose 1.2 percent in July. Per Mr. Lobo, agribusiness demand has underpinned growth in the segment as producers ship their crops abroad.

Meanwhile, passenger transportation has bounced back 0.4 percent above pre-pandemic levels, following the post-Covid restrictions resumption of tourism. 

Services provided to families, up by 0.6 percent, extended its growth streak to five months. But even with these successive bumps, the segment remains 5.7 percent below pre-pandemic levels — as families have lost purchasing power due to scorching inflation and shrinking wages.

From January to August, withdrawals from Brazilian saving accounts were BRL 85.1 billion (USD 16.4 billion) higher than deposits, a record mark since 2015.

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