Brasília – Spending by Brazilians on international trips reached US$ 1.664 billion in May, a record high, according to information disclosed this Monday (27th) by the Central Bank of Brazil. In the first five months of the year, spending reached US$ 8.331 billion.
In turn, spending by foreigners visiting Brazil reached US$ 543 million last month, resulting in a US$ 1.12 billion travel account deficit, the lowest figure ever for the period.
From January to May, spending by foreigners in Brazil reached US$ 2.881 billion, resulting in a deficit of US$ 5.45 billion, also the highest ever for the period. The Central Bank revised its projection for the travel account deficit this year upward from US$ 12 billion to US$ 15 billion.
Brazilian credit card spending abroad, however, is declining, according to the head of the Economic Department of the Central Bank, Tulio Maciel. In April this year, credit card spending by Brazilians on foreign trips reached US$ 1,179 billion and dropped to US$ 909 million in May. The figure represented 60.7% of total spending on international trips in April. In May, the rate dropped to 54.7%.
In the comparison between April this year and the same period of last year, credit card spending grew by 53.8%. In May compared with the same month of 2010, there was growth of 33.9%. “Brazilians are still travelling, but now they are paying more in cash than with credit cards,” said Maciel.
The government raised the Tax on Financial Operations (IOF, in the Portuguese acronym) on purchases using credit cards abroad. The decree, issued on March 28th in the Official Gazette raised the IOF on international credit card purchases from 2.38% to 6.38%. According to Maciel, rate became effective 30 days after the ruling was published, and the aim was precisely to reduce credit card spending by Brazilians.
*Translated by Gabriel Pomerancblum
