Brazil's services sector grows much more than expected in April

The volume of services in Brazil rose well above expectations in April with a boost from the transport sector and widespread gains, after a weak first quarter.

In April, the volume of services increased 1.2% in relation to the previous month, above the expectation in a Reuters survey of an increase of 0.6%, recovering the loss of 1.1% recorded in March.

The data released this Thursday by IBGE (Brazilian Institute of Geography and Statistics) also shows that, in relation to the same month of the previous year, the volume showed a gain of 1.9%, against a projection of 0.9%.

With these results, the services sector operates just 0.3% below the top of the series, reached in October 2025.

"In fact, the month of April brought a full recovery from the setback observed in March", said Rodrigo Lobo, research manager at IBGE.

"March's result can be explained by the seasonal adjustment model. It was a month with a high number of working days (22) and the model ends up smoothing the movement, which ends up generating greater pressure on the month. April ended up benefiting from this lower comparison base from the previous month", he explained.

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The services sector, which accounts for around 70% of the country's economy, slowed expansion to 0.5% in the first quarter, according to GDP data released by IBGE, amid a strong job market and stimulus measures, but still high interest rates.

In April, all five sector activities investigated showed gains, with emphasis on the 0.9% increase in transport.

"The result of the transport sector is explained, to a large extent, by the 7.0% increase observed in the passenger air transport segment", after two negative results in a row, said Lobo.

"This volatility is strongly influenced by air ticket prices, as in February and March there was an 18.4% increase in prices, while in April there was a 14.45% drop in this IPCA sub-item", he added.

In April, the volume of passenger transport increased 2.6% over March, but cargo transport fell 0.9%.

The tourist activity index, in turn, grew 4.1% in April compared to the previous month after two months of losses, remaining 2.2% below the peak of its historical series, in December 2024.

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Source: CNN