Alexandre Espirito Santo: Services sector recovers, but health crisis is a risk for 2022

The economic activity of 2021, still under the strong influence of the pandemic, presented a series of contrasting data around the world, and in Brazil it was no different. At times like these, analyzes are much more complex than simple indicator readings. Care must be taken so that the interpretations of statistics about the period do not carry analysis biases, which could lead us to a less accurate interpretation of what actually occurred.

A first aspect is that we cannot forget that in 2021 we had vaccination thriving in our country at a very good rate, even higher than that practiced in some central countries. We are already close to 70% of our population with a complete vaccination schedule (two doses). This process was very positive for society to begin to gain “confidence” for the return to normality, which has been happening gradually.

On the other hand, we had serious difficulties in relation to the macroeconomy. The spending ceiling put the fiscal framework in check, with harmful impacts on inflation, which exploded. The Selic interest rate rose sharply, going from 2% to 9.25% per year in a short time, impacting the yield curve, which bucked. From this point of view, the recovery ended up being affected, although we probably grew by around 4.5%, largely due to the statistical legacy of 2020.

At the same time, there are undeniable improvements in the microeconomic reform agenda, which dynamize the economy and may improve potential GDP in the future. Here I refer to Lei do Gás, Br do Mar, the new exchange rate mark and many others.

Given these findings, how to interpret the recent figures released? Which way do they point, anyway?

A few days ago, the IBGE showed the drop in industrial production, in a series of six consecutive months. This disappointing result suggests a difficulty for the economy to regain traction on the more “traditional” side, which would have job creation and sustained strength.

This Thursday (13), however, the institution published the PMS (Monthly Services Survey), referring to the month of November, showing that the service sector grew 2.4% compared to October, which had contracted.

Certainly, vaccination helped a lot here. As a result, the indicator is already almost 5% above the period prior to the pandemic and, for the year, the sector is already showing gains close to 11%, which shows that the recovery, despite the very low basis of comparison, is a reality. It is worth remembering that the weight of the service sector in the formation of GDP exceeds 70%, and it is a great generator of jobs.

An auspicious point, in the detailed analysis of the result, is the widespread increase in the activities surveyed, since in four of them we had gains compared to October, with emphasis, mainly, for information and communication services, with growth of more than 5%, which shows the strength of this segment. In fact, for 2022, it is expected that the deployment of 5G in the country will be one of the engines to help the recovery. I have no doubts about how promising the Information Technology (IT) and related areas will be in the coming decades.

But, you can’t hesitate!

Although the number is positive, unfortunately the total volume of services only returned to the level of December 2015, which shows that there is still a lot to work on for the recovery, aiming at the level of the end of 2014, in the series with seasonal adjustment. However, as described above, when we look specifically at IT, the numbers are very encouraging, as we have quarterly performances close to 30% in 2021.

I’m relatively optimistic about the service sector’s recovery, especially if the disease doesn’t flare up, which is always a risk with new variants. From this perspective, it is important that society remains committed to ending this health nightmare. May we have an election year more focused on the debate of ideas, instead of this political fluff that took over the country on social media.