In March, Brazil services sector confidence slumps to lowest since last June – FGV survey

RIO DE JANEIRO, BRAZIL – The fall in Brazilian services sector confidence accelerated in March to its lowest since June last year, a survey showed on Monday, March 29, as the deadly second wave of the Covid-19 pandemic darkened the outlook for businesses and consumers.

The Getulio Vargas Foundation’s (FGV) services sector confidence index fell 5.6 points to 77.6 points in March, the third consecutive decline and the lowest since June’s 71.7.

The index remains well above last April’s record low 51.5, but on the other hand it is falling further below the pre-pandemic level of 94.4 in February last year.

“The picture is still highly uncertain, making it difficult to envision a recovery in the coming months as long as there is no acceleration in the vaccination process and improvement in the pandemic numbers,” FGV economist Rodolpho Tobler said.

Services account for around 70% of all economic activity in Brazil. A recovery in the sector will be crucial to sustaining wider economic growth.

The expectations index fell more than the current conditions index in March, FGV said, suggesting no imminent turnaround.

Brazil’s Covid-19 crisis is deepening and the country is now the global epicenter of the pandemic. The new case count topped 100,000 one day last week and the daily death toll is now approaching 4,000.