By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – The deteriorating economic situation in the country led many Brazilians to reduce their spending abroad in January, a traditional holiday month for Brazilian families. According to the Central Bank (CB) foreign expenses by Brazilian travelers decreased by 62 percent in January of 2016 in comparison to January of 2015.
The volume spent in January 2016, US$840 million, was the lowest spent by Brazilian travelers abroad since January of 2009, according to the CB. According to Bank officials the overall economic recession, added to the significant appreciation of the US dollar, in comparison to the Brazilian real, and the newly created tax over tourism services paid abroad, discouraged foreign spending.
During the month of January alone, the US dollar appreciated by over 1.90 percent, surpassing many days the R$4.00/US$1 foreign exchange rate. With the depreciating Brazilian real, hotels, airline tickets and souvenirs become more expensive for Brazilians traveling abroad.
To add to the already gloomy conditions, the government decided to apply a 25 percent tax over tourism services paid abroad. In practice this meant that any services to be used abroad, such as car rentals, hotels and excursions trips, but paid in Brazil had an additional 25 percent tax added to it.
And analysts say that the tendency of decreased foreign spending is likely to continue. Partial results released by the Central Bank for February show that until February 19th, there was already a forty percent reduction in spending by Brazilian tourists abroad in comparison to February of 2015.
Meanwhile, all the factors, which led Brazilians to remain at home during the summer holidays, have attracted foreign visitors to the country. According to government data, revenues by foreigners in the country in January increased by 14.44 percent, to US$650 million. For February, revenues have already increased by 21 percent.