By Marcela Ayres

BRASILIA. (Reuters) – Services activity in Brazil increased more than was expected and at a record pace in March. Official figures revealed this on Thursday. It is a clear sign that Brazil has made a significant recovery after the COVID pandemic.

According to the IBGE government statistics agency, 1.7% of services activity rose in March compared with February. That’s more than twice the 0.7% predicted by economists. It reached its highest level since May 2015.

The sector was 7.2% higher than the February 2020 level, just before the pandemic. IBGE found that five of the sectors activities experienced an increase, with transport seeing the largest growth at +2.7% while information and communication services saw the greatest increases at +1.7%.

Service activity increased 11.4% in March 2021, surpassing the 8.5% growth forecast by Reuters.

It grew by 9.4% in the quarter ended December 31, compared to the same quarter last year and amounted to 1.8% increase over the prior quarter.

Rodrigo Lobo, research manager said that the sector was impacted by a weaker comparison. He also noted that Brazil faced an additional wave of COVID-19 in March 2021 that placed strict restrictions on mobility.

“That is why, in March, the year-over-2018 comparison, there are very large rates for activities such as air transport for example,” he stated.

Brazil’s Economy Ministry argued that this year the economic performance will be supported by a strong labor market and higher private investment. This would help to offset the negative effects of double-digit inflation.