Shoppers and diners in the main hall of São Paulo's Municipal Market, the Mercadão. Services to families, which include food services, were the only segment to grow in August. (Photo: Celykzk, CC BY-SA 4.0, via Wikimedia Commons)

ECONOMY · BRAZIL

Brazil services volume slipped 0.1% in August from July, the national statistics office IBGE said on Wednesday 14 October. The dip leaves the sector just 0.3% below the record it set in October 2025.

For US investors, it adds to signs of a cooling economy as the central bank weighs cutting its 13.75% Selic rate again. Tourism activity, a separate index covering travel-related businesses, rose 2.5% for a second straight monthly gain.

What the August Data Show

The Brazilian Institute of Geography and Statistics (IBGE) runs the Monthly Services Survey, known by its Portuguese initials PMS. It measures the volume of services sold, which strips out the effect of price changes.

On seasonally adjusted figures, volume fell 0.1% in August after a flat July and a 0.1% rise in June. The last clear monthly gain was a 1.2% jump in April, which followed a 1% drop in March.

Compared with August 2025, services volume was 0.6% higher. It grew 1.7% in the first eight months of 2026 and 2.2% over the past 12 months.

Nominal revenue, which includes price changes, rose 0.2% on the month and 6.1% on the year. The gap between revenue and volume growth suggests that service prices are still rising briskly.

The sector stands 19.9% above February 2020, the last month before the pandemic hit Brazil’s economy. Since its October 2025 peak, however, the index has moved sideways within a narrow band.

Brazil's services volume index has moved sideways since its October 2025 peak. (Chart: The Rio Times; data: IBGE, 14 October 2026)

Where Brazil Services Grew and Shrank

Only one of the five main Brazil services segments grew in August: services provided to families, which rose 2.1%. That group covers accommodation, food services and other personal services.

Information and communication services, which include telecoms and IT, were unchanged from July. Professional and administrative services fell 0.2%, as did transport, auxiliary transport services and mail.

The catch-all group of other services posted the steepest monthly fall, down 1%. It was also 2.5% lower than in August 2025.

On the year, transport was 2.8% lower, while information and communication grew 4.3%. Services to families were 4.2% higher and professional and administrative services 1.7% higher.

Tourism Rebounds After a Weak June

IBGE’s tourism activity index, calculated separately from the five segments, rose 2.5% from July. It was the second monthly gain in a row, adding up to 5.5% since June.

Part of that gain is a recovery, because the index had fallen 3.9% in June. In August it was 0.9% higher than a year earlier but still 0.8% lower for the year to date.

The tourism index stands 12.4% above its February 2020 level. It is 1.1% below its peak, reached in December 2024.

What It Means for You

For US investors in Brazilian stocks and bonds, the data point to an economy losing speed under high interest rates. The central bank has cut its Selic rate five times since March, from 15% to 13.75%.

Weaker services activity gives the central bank more room to keep easing, but inflation remains the main constraint. Economists in the central bank’s weekly Focus survey expect 5.22% inflation in 2026, above the 4.5% ceiling of the target range.

The International Monetary Fund also trimmed its outlook this week, as covered in IMF Cuts Brazil 2026 Growth Forecast to 2.2%. For US travel firms and visitors, the tourism index shows demand for hotels, transport and restaurants recovering after a weak June.

For background on the economy and who holds power, see Brazil Explained 2026 for Newcomers on Politics and Economy and Who Dominates Brazil, Elites and Regions Explained. Readers in the country’s business capital can follow local news on our São Paulo city page.

What Is Not Known

The national figures do not show whether the August dip reflects weaker demand or one-off swings in the volatile other services group. It is also unclear whether the tourism rebound will hold into the end of the year.

The central bank weighs inflation, the labour market and the global outlook alongside activity data. Its statement after the 3 to 4 November meeting will show how much weight policymakers give to the slowdown in services.

What Prediction Markets Say

On Polymarket, bets give a 0.25-point Selic cut at the November meeting an 87% chance (14 October, 2:48 p.m. ET). A pause is priced at about 10%, and a cut of 0.5 points or more at about 3%.

About US$59,000 has been traded on the market so far, including about US$8,900 in the past 24 hours. Over the past week, the price of a 0.5-point cut fell by about 6 points, while a pause gained about 5 points.

Why we show this: prediction markets turn real-money bets into a live probability that moves within minutes of the news, which is why investors, campaigns and newsrooms in the United States now follow them closely. We show them next to polls and official results, never instead of them.

Frequently Asked Questions

What did the Brazil services data show for August?

Services volume fell 0.1% from July on seasonally adjusted figures, IBGE said on Wednesday 14 October. It was still 0.6% higher than in August 2025.

Which part of the services sector grew?

Only services provided to families, which include accommodation and food services, grew, rising 2.1%. Information and communication was flat, and the other three segments fell.

How did tourism perform?

IBGE’s tourism activity index rose 2.5% in August, its second monthly gain in a row. It remains 1.1% below its December 2024 peak.

Why does this matter to US investors?

Services data feed into the central bank’s interest-rate decisions, which move Brazilian bonds, stocks and the currency. The Selic rate stands at 13.75% after five cuts since March.

When is the next interest-rate decision?

The central bank’s Monetary Policy Committee, known as Copom, meets on 3 and 4 November. On 14 October, Polymarket bets gave a 0.25-point cut an 87% chance.

Sources: IBGE Monthly Services Survey (SIDRA table 5906) · IBGE services by segment (SIDRA table 8688) · IBGE tourism activity index (SIDRA table 8694) · Agência Brasil · Central Bank of Brazil, Selic target series

This article was drafted with automated assistance and reviewed before publication. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief