By Jamie McGeever
BRASILIA, Nov 12 (Reuters) - Brazil’s services sector activity jumped in September, official figures on Tuesday showed, rising at the fastest pace in over a year and suggesting Latin America’s largest economy ended the third quarter on a strong footing.
The 1.2% rise from August was the biggest month-on-month rise since August last year, government statistics agency IBGE figures showed, and was almost twice the 0.7% rate of expansion expected in a Reuters poll of economists.
Services account for over 70% of Brazil’s economy, the largest in Latin America, and the data would appear to tie in with recent purchasing managers index (PMI) figures.
IHS Markit’s composite PMI comprising manufacturing and service sector index data over the July-September period point to third quarter GDP growth of around 0.8%. That would be double the 0.4% quarterly GDP growth posted in the second quarter.
Services activity in Brazil grew 1.4% in September from September 2018, IBGE said, more than double the 0.6% median forecast in a Reuters poll.
Over the course of this year, however, the accumulated figures are not quite so encouraging. Service sector activity rose only 0.6% in the first nine months of this year, and only 0.7% in the 12 months to September, IBGE said.
Brazil’s economy is expected to grow by less than 1.0% this year, according to estimates from the government, central bank and most private sector economists. The central bank has already cut interest rates to a record low 5.00% and has signaled it will reduce them further next month. (Reporting by Jamie McGeever Editing by Chizu Nomiyama)