Brazil services confidence rises, still below pre-pandemic level

BRASILIA, Dec 29 (Reuters) - Confidence in Brazil’s services sector rose in December for the first time in three months, a survey showed on Tuesday, but continued concern over coronavirus means confidence remains below pre-pandemic levels from February.

Services account for around 70% of all economic activity, and they have lagged other areas, such as manufacturing and industry, in recovering from the pandemic-fueled slump. Its recovery is crucial to sustaining wider economic growth.

The Getulio Vargas Foundation’s (FGV) services sector confidence index rose 0.8 points to 86.2 points in December, after two monthly declines had halted the recovery from April’s record low 51.5.

As the FGV chart below shows, the index stood at 94.4 in February before the pandemic struck.

“Although favorable, caution is needed as consumers are still quite fearful of the increase in the number of (COVID-19) cases and uncertainty regarding the arrival of the vaccine in Brazil,” said FGV economist Rodolpho Tobler.

“The outlook for the coming months is for the recovery to continue, but there is still a long way to go to get back to the pre-pandemic level,” he said.

Reporting by Jamie McGeever, editing by Larry King