First, a snapshot of its overall picture:
—The Organization for Economic Co-operation and Development (OECD) tells us that, after a strong recovery by 5 percent in 2021, Brazil’s GDP growth is expected to slow significantly in 2022, to 0.6 percent, before picking up to 1.2 percent in 2023. Rising inflation, the war in Ukraine, and tighter financial conditions have eroded economic sentiment and purchasing power, which is expected to strongly dent domestic demand in the first half of 2022.
—As previously noted by INBOUND, Brazil’s 2022 presidential election is adding uncertainty, helping to keep investment subdued until 2023. During such times, a nation’s people who have the capacity and means to travel internationally are hesitant.
—And then, there is the matter of the largest quadrennial sporting event in the world—futbol’s World Cup, which is scheduled to take place in Qatar from November 21 to December 18, 2022. It is expected to put a damper on international travel by anyone—unless you’re one of the fortunate few who has tickets and is making the trip to Qatar to watch the matches in person.
The table below shows us what an economy that has gone through two economic recessions, a fair degree of political turbulence and a global pandemic looks like. In spite of all it has experienced in recent years, Brazil and its people—including its population of international travelers—remain competitive on the marketplace.
A case in point is that, using NTTO data through the first six months of this year, Brazil ranks Number 5 as a source market for overseas visitors to the United States. Chances are that, once the summer travel season (it’s winter in Brazil) is over, the country could very well have sent enough visitors to approach the million-visitor mark for the year.
Overseas Arrivals to USA
|Year||Number of Arrivals (millions)|
* Through June 2022
Population in 2010: 195.7
Population in Jun3 2022: 214.8
Change in population: + 9.8 percent
Sources: U.S. Department of Commerce’s National Travel & Tourism Office, tradingeconomics.com; Brazilian Institute of Geography and Statistics (IBOE).
Yes we can! In the latest Brazilian Overview Monthly Report (BOM Report)—a joint effort of the Brazilian publishing company PANROTAS and FecomercioSP, an economic research organization, José Guilherme Alcorta, CEO of PANROTAS, told readers, “As we advance in the second half of the year, we will still have many disruptions and headaches, that are impacting the tourism recovery after these months of pandemic restrictions.”
He adds, “Inflation, fuel cost, airlines tickets skyrocketing, flight delays and cancellations, especially in Europe and the US, and the devaluation of our currency against the U.S. dollar are factors that may delay even more the rebound of international travel in Brazil.”
We keep optimistic, after all we have some very great numbers and the covid restrictions are almost gone, but also alert, he says—taking note of some of some sluggish benchmark numbers that industry analysts point to:
- First, there is the Consumer Confidence Index, which retreated 2.1 percent in June and reached 103.6 points, considering the 105.9 points in the month of May. In comparison with the same month in 2021, there is a 3.5 percent decrease.
- Then, there is more inflation—according to estimates performed by FecomercioSP fuel cost, airline tickets are skyrocketing, and there are flight delays and cancellations, especially in Europe and the U.S. As well, the devaluation of its currency (the Real) against the US dollar are factors that may delay even more the rebound of international travel in Brazil.
- Tourism inflation, specifically, was 41 percent in the 12 months up to June, according to estimates performed by FecomercioSP. The index was driven by the increase in flight tickets by 122.40 percent. This item has suffered on behalf of the rise in the aviation kerosene prices. (This article, archived in the New York Times, explains the “ancient” importance of kerosene to the Brazilian economy.)
José Guilherme Alcorta closes out the latest BOM Report this way: “We keep optimistic, after all we have some very great numbers and the covid restrictions are almost gone, but also alert.
Have a great end of Summer (for those up North) or Winter (for us down here).”
You can contact José Guilherme Alcorta here: [email protected]
To recommend the Brazilian Overview Monthly Report to a friend or colleague, click here.