BRASILIA (Reuters) – Services activity in Brazil grew more than expected in March and at a record pace for the month, official figures showed on Thursday, marking a strong recovery from the severe recession caused by the COVID pandemic.
Services activity rose 1.7% in March from February, more than double the 0.7% growth expected by economists according to a Reuters poll, reaching its highest level since May 2015, a report said. reported the government statistics agency IBGE.
This puts the sector 7.2% above the February 2020 level, before the start of the pandemic. All five activities surveyed in the sector grew, with the biggest increases seen in transport at +2.7% and information and communication services at +1.7%, the IBGE said.
Services activity rose 11.4% from March 2021, also above the 8.5% rise forecast in the Reuters poll.
In the first quarter, it increased by 9.4% compared to the same period last year, up 1.8% from the previous quarter.
Research director Rodrigo Lobo said the weak comparison base had pushed the sector higher, noting that in March 2021 Brazil was facing a second wave of COVID-19 which imposed strict restrictions on mobility.
“That’s why in March, in the year-over-year comparison, there are very high rates for things like air travel, for example,” he said.
The Brazilian Economy Ministry argued that the performance of the services sector will support the economy this year, along with a stronger labor market and increased private investment, helping to mitigate the effects of interest rates. high to fight double-digit inflation.
Following the results, Credit Suisse issued a note to clients revising its outlook for GDP growth this year to 1.4% from 0.2% earlier, very close to the government’s official estimate of 1.5%. .
“Upside surprises in services were most expressive in sectors that have been heavily impacted by the pandemic, indicating a faster recovery in the supply side of the economy,” wrote Solange Srour, chief economist at Credit Suisse. Brazil.
(Reporting by Marcela Ayres; Additional reporting by Rodrigo Viga Gaier; Editing by Mark Potter, Paul Simao and Mark Porter)
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