The results indicate that staging the World Soccer Cup in Brazil did not reduce the flow of Brazilians traveling abroad – it actually increased between June 12 and July 13.
As for inbound traveler spending, revenues amounted to US$ 789 million in July, up from US$ 540 million recorded in the same month last year. From January to July, revenues reached US$ 4.436 billion, compared to US$ 4.020 billion in the first seven months of 2013.
With these results, the international travel balance was negative by US$ 1.625 billion last month, compared to US$ 1.654 billion in July 2013.
On the other hand, Brazil’s US$ 1.574 billion trade surplus (exports greater than imports) last month helped offset the impact on the current account deficit, which notwithstanding stood negative at US$ 918 million in the January-July period.
60 Million in Default
The number of Brazilians faced with overdue debts has reached a record 57 million, and is now higher than it was in August last year (55 million people), reports Serasa Experian, which holds the country’s largest consumers database, covering both natural and legal persons.
The survey also shows that 60% of insolvents face outstanding bills totaling over 100% of their monthly income. In addition, 53% are burdened with up to two unsettled debts.
According to experts from Serasa Experian, the heightened number of insolvents derives from increasing indebtedness among families and injudicious shopping habits. Consumers, he maintains, fail to take into consideration regular monthly expenses and previously incurred debts.
Payments divided into installments with high interest rates, as is typical with the purchase of cars and property, along with costly fees arising from overdrawn accounts and credit card transactions are also harmful to the budget and contribute to insolvency, the analysts from the institution argue.
“The current situation is worrying, as it reveals that 40% of the 144 million Brazilians aging 18 or above are in default. But it’s still not enough to be considered alarming, since the debts don’t amount to a lot. Nonetheless, it calls for a closer analysis and closer attention,” said Vander Nagata, Serasa Experian’s Superintendent for Information on Consumers.
In his view, the urge to shop indiscriminately should be eliminated through financial education and transformed into awareness. Buyers should also stop shopping on an impulse or ostentatiously. “This is the challenge faced by Brazilians, who spend more money than they make, and don’t save any, in spite of being aware of the importance of this behavior” he noted.
He went on to highlight that companies should make wide use of risk reduction tools when granting credit to customers. “Creditors should be given more information for a more accurate assessment of payment capability. Credit is a powerful tool for economic development, if the debt is cleared. If there’s default, it’s harmful,” Nagata added.
Unemployment
The unemployment rate faced an increase in three of the four metropolitan areas in July, according to figures from the Monthly Employment Survey (“PME”) released August 21 by the Brazilian Institute of Geography and Statistics (IBGE).
The metropolitan region of São Paulo was the only one reported to have experienced a decline: 5.1% in June, against 4.9% in July. The increase for Recife (capital state of Pernambuco) was from 6.2% to 6.6%. The expansion in the metropolitan regions of Rio de Janeiro and Belo Horizonte (Minas Gerais) was 3.2% to 3.6%, and 3.9% to 4.1%, respectively.