In brief: Second Covid wave hits Brazil’s services sector

* Brazil’s national statistics institute (Ibge) has released its latest figures on the services sector, which show that the volume of services shrank 4% in March compared with February. In year-on-year terms, the volume of services grew 4.5% compared with March 2020, when the economy went into shutdown with the onset of the coronavirus (Covid-19) pandemic. The sector has accumulated a negative -8% variation in the 12 months to March 2021. The March result eliminates most of the gains from February, and puts the services sector back below pre-pandemic levels. Rodrigo Lobo, the manager of Ibge’s services research, notes that the negative monthly result for services to families (-27%), transport and related services (-1.9%), and professional & administrative services (-1.4%) reflects the reinstatement of restrictions against Covid-19 as Brazil was engulfed in a second wave. “They [the restrictions] had less of an impact than in March 2020, but they were sufficient to make the services sector shrink and return to pre-pandemic levels”, Lobo explained.

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