MercoPress. South Atlantic News Agency

February's services sector confirms Brazil is heading for recession

A replica of Christ the Redeemer statue wearing a mask. FABIO TEIXEIRA / GETTY IMAGES.

Services activity in Brazil shrank 1% in February, official figures showed on Wednesday, the biggest monthly fall in over 18 months and another sign Latin America's largest economy was already in go-slow mode before the coronavirus crisis erupted.

Services accounts for around two-thirds of Brazilian economic activity, and much of it has now been virtually shut down as a result of the strict virus-linked policies restricting people's movement in key states like Sao Paulo and Rio de Janeiro in March.

The decline marked the third fall in the last four months, IBGE said. “Unlike the early signs of recovery that we saw towards the end of 2019, we are seeing the emergence of weaker numbers in recent months,” said IBGE survey manager Rodrigo Lobo.

February's month-on-month fall was the biggest since July, 2018, IBGE said. Activity rose 0.7% on the same month a year ago

The figures for February show that Brazil's services sector is still 11.1% smaller than it was at its peak in November 2014, just before the country fell into one of its deepest recessions on record.

Three of the five sectors surveyed showed a decline in activity, with professional and administrative services falling 0.9%, the third drop in a row.