Consumer Behavior in Brazil: Even with US Dollar appreciation, spending abroad hits record
Even the 15% appreciation of the dollar against the Brazilian Real in 2013 (the highest in the last five years, making air tickets and hotels quoted in foreign currency more expensive) did not deter the spending by Brazilians abroad, which grew to a new record.
According to figures released by the Brazilian Central Bank recently, the spending of Brazilians abroad totaled U.S. $ 25.34 billion (considering the price of the U.S. dollar on Friday, would be U.S. $ 61.14 billion) in the whole last year, representing a growth of 14% over 2012 – which was the previous record, with expenditures of $ 22.23 billion.
Increased spending abroad is related, according to economists, the continuity of growth of employment and income in Brazil, even with a slower pace of expansion, and also the low prices of products in some countries.
Late last year, however, the Brazilian government adopted measures to contain this type of expenditure. The Tax on Financial Transactions (IOF) levied on foreign exchange payments made with debit cards, withdrawals in foreign currency abroad, purchases of travelers checks (traveler’s checks) and loading prepaid cards was increased from 0, 38% to 6.38%. Accordingly, these operations have been given the same taxation of international credit cards.
Outlook for 2014
Even with the high costs for the IOF abroad, the deputy head of the Economic Department of the Central Bank, Fernando Rocha, assessed that the costs out there should record growth this year, and with it, hitting a new record. For BC, however, the high should be lower than the 14% recorded in 2013. “The increase in income Brazilians must be greater than the high costs abroad,” he explained.
History of expenses abroad
In 2011, spending abroad reached U.S. $ 21.2 billion. Between that year and 2012, growth was 4.5%.
Until 1994, when the Real Plan was released to contain hyperinflation in the country, spending by Brazilians abroad had not reached the threshold of $ 2 billion. That year, however, totaled $ 2.23 billion. Between 1996 and 1998, expenditure abroad ranged between $ 4 billion and $ 5.7 billion.
With the currency “devaluation” of 1999 and going up over $ 3 in a first moment dollar expenditure abroad also become more expensive. With this, the expenses back to back and were, in that year, close to $ 3 billion.
The costs of Brazilians in other countries again reached the barrier of $ 5 billion per year until 2006. Since then, have shown strong growth. In 2007, 2008 and 2009, for example, amounted respectively to $ 8.2 billion, $ 10.9 billion and $ 10.8 billion
via Economy – Even with high-dollar, spending by Brazilians abroad hit record.