Brasília – As a result of the recent US dollar hike, international travel spending by Brazilians is unlikely to drop, but should increase at a slower pace, according to the head of the Brazilian Central Bank’s Statistics Department Fernando Rocha. “A depreciation of the real makes spending money abroad more expensive. This discourages people when it comes to taking trips abroad,” he said. This month, the dollar averaged BRL 3.61, up from BRL 3.21 as of May 2017.
According to Fernando Rocha, the effects of the dollar hike this month are yet to be fully felt. This is so because consumers had already planned out their trips and bought packages and plane tickets. “The effects are felt as the month progresses,” he said.
Rocha said Brazilians may make adaptations in order to cut spending in trips they have already scheduled and arranged. “Over time, it depends on where the exchange rate will be. If the depreciation [of Brazil’s currency] persists for longer, [then consumers] will decide whether to really go abroad or to choose cheaper routes,” he said.
By the 22nd this month, international travel expenses had reached USD 1.170 billion. In May 2017, spending had come out to USD 1.496 billion. “If we look at daily average figures, spending this May should exceed May 2017, but the growth rate will be weaker,” he said.
Year-on-year in April, spending during trips abroad was up 16% to USD 1.538 billion. This month, Rocha believes growth should be “slightly lower.”
Numbers made public this Thursday (24) by the Central Bank show that year-to-date through April, Brazilian citizens spent USD 6.470 billion on international trips, up 11.6% from USD 5.799 billion a year ago.
Translated by Gabriel Pomerancblum
