Brazil's services activity enjoys boost from Lady Gaga's free concert, holidays

By Rodrigo Viga Gaier and Camila Moreira

RIO DE JANEIRO/SAO PAULO, June 13 (Reuters) - Lady Gaga's massive free concert in Rio de Janeiro and a series of holidays likely provided a boost to Brazil's services activity in April, statistics agency IBGE said on Friday, as it reported the key sector expanded for a third straight month.

As fans flocked to Rio for the U.S. singer's concert at Copacabana Beach on May 3, the transport sector helped drive services activity in Latin America's No.1 economy up 0.2% in April from March, IBGE said, despite high interest rates.

"Advanced ticket purchases for the Lady Gaga concert may have influenced the April results. The concert was in May, but ticket purchases were made ahead of it," said IBGE's research analyst Luiz Almeida, also pointing to holidays in the month.

"It was a month marked by a long weekend, and that may have helped the transport sector," Almeida said, referring to periods that usually see a travel rush.

Transport activity expanded 0.5% in the month, standing out as the only one of the five main groups surveyed to have posted positive results.

Brazil had a long weekend from April 18 to 21, while Rio de Janeiro state celebrated a local holiday on April 23. In the week leading up to Lady Gaga's concert, the country also had a national holiday on May 1.

On a yearly basis, services activity grew 1.8% in April, roughly in line with market forecasts.

Brazilian airlines had previously said they saw a boost in demand related to Lady Gaga's concert, operating more flights to Rio's main airports that were close to full.

Rio de Janeiro's city government estimated that 2.1 million people attended the show, part of its efforts to bring superstars to perform at free events that authorities say lift the local economy.

The South American country had experienced a similar episode in late 2023, when IBGE reported that the six-show Brazilian leg of Taylor Swift's "The Eras Tour" boosted event-related activities.

The service sector is the main driver of Brazil's economy, and the positive April figures came as the country shows signs of a slowdown amid high borrowing costs, with its benchmark interest rate standing at a near 20-year-high of 14.75%.

The latest data prompted PicPay economist Igor Cadilhac to revise his estimate for service sector growth this year to 2.1% from 1.6%, though cautioning that a mix of sticky inflation, elevated interest rates and deteriorating financial conditions should still curtail economic activity in the second half.