Northeast has faster recovery of consumption and tourism in the pandemic

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The Northeast was the region of the country that had the fastest recovery in consumption of goods, services and tourism after months of greater restrictions on mobility during the Covid-19 pandemic, according to a study published by the Central Bank on Tuesday (23).

According to the survey, the fall was more pronounced in the Northeast and Southeast in 2020, but the former had a faster recovery. In 2021, the movement was repeated with the worsening of the health crisis in March and resumption in the following months.

In April 2020, the drop in consumption was equivalent in the Southeast and the Northeast, both with a 32% retraction. The South was in third place, with 26%.

“The recovery throughout the rest of the year [2020] it was more intense in the Northeast, possibly reflecting the greater relative importance of emergency aid in maintaining the income of families in the region,” said BC in relation to the consumption of goods and services.

“The aid also seems to have influenced the growth of purchases of furniture and appliances, with greater emphasis on the Northeast in the second half of 2020”, he continued.

The survey showed that in 2021 there was a strong influence from the normalization of consumption of services to families and the growth in car purchases.

“The Northeast is the region with the greatest recovery in the consumption of services to families compared to the pre-pandemic level. Considering the reduction in the number of beneficiaries and in the value of emergency aid, this performance may have been influenced by the recovery of the tourism sector, at a more intense pace than that observed in other regions”, highlighted the survey.

For the BC, in the South and Southeast, the normalization of services to families should represent an important boost for consumption in these regions in the last quarter of this year.

The monetary authority highlighted that the impact of the pandemic on consumption was different between regions, reflecting differences in income, consumption patterns and possibly the relief measures adopted by the government, especially emergency aid.

In tourism, the Northeast also stood out in the recovery.

“The regional analysis shows different rates of recovery, highlighting the higher growth of the Northeast, in comparison, above all, with the Southeast. In the last three months, with seasonally adjusted data, [as regiões] are, respectively, 0.4% and 23.7% below the pre-pandemic level”, pointed out the survey.

According to BC, the greater participation of tourist activities in formal employment in the Northeast compared to other regions makes the sector’s recovery even more relevant for the local economy.

“The total payments made to the hotel sector through credit and debit cards reveals recovery in all regions and more accelerated in the Northeast, a region that, since June, surpassed the 2019 level in nominal values”, reveals the study.

The autarchy also highlighted that the recovery of tourism is taking place with greater intensity in smaller municipalities, with up to 250 thousand inhabitants. This is because the leisure segment has been preponderant in the recovery.

Business travel, which usually takes place in larger cities and capitals, is still about the effects of behavioral changes adopted in the pandemic, such as virtual events and meetings, in addition to the home office or hybrid work regime.

“Tourism is being one of the last sectors to recover, as it is heavily dependent on social contact. Conditional on the pandemic not worsening, the growth seen in recent months should continue, in line with the advance of vaccination, with relevant impacts on employment. Regionally, the Northeast is more advanced in the process”, concluded the BC.

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