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By Jamie McGeever
BRASILIA, Feb 13 (Reuters) - Services activity in Brazil shrank 0.4% in December, official figures showed on Thursday, the latest in a series of indicators suggesting the economy lost steam at the end of 2019, pointing to a less rosy outlook for growth this year.
The decline marked the second consecutive monthly fall, something not seen since February-March last year, government statistics agency IBGE said, and was larger than the median forecast for a 0.3% fall in a Reuters poll of economists.
Coming on the back of weaker-than-expected retail sales, industrial production and current account data, the figures appear to validate those economists who have recently lowered their 2020 growth forecasts closer to 2% from around 2.5%.
The figures showed year-on-year growth of 1.6% and confirmed that 2019 was the first year in five that activity increased. But if the Brazilian real’s lurch to another fresh low against the dollar early on Thursday is any guide, the reaction among investors and economists will be one of disappointment.
Three of the five activities surveyed showed a fall in activity, IBGE said. Transport and mail fell 1.5% on the month, while professional, administrative and related services, as well as family-related services fell 1.3%.
On a non-seasonally adjusted basis, activity in December rose 1.6% compared with the same month the year before, IBGE said, in line with the Reuters poll of economists.
The figures for December meant services activity in Brazil grew by 1.0% over the course of 2019, the first annual rise in five years, IBGE said.
“We are now growing again, and it’s worth remembering that between 2015 and 2017 we had an accumulated loss of 11%, so this increase is important,” said IBGE survey director Rodrigo Lobo.
“But this is still a long way off the service sector’s best performance,” he said.
The data also runs counter to purchasing managers index figures that showed that growth in Brazil’s services sector slowed in October to its weakest in four months. (Reporting by Jamie McGeever; Editing by Hugh Lawson)