MAIN FACTS
Since the last BOM Report, published in November of last year, several significant events have marked the global economy and politics.
The inauguration of Donald Trump as President of the United States has brought greater unpredictability to the economic landscape, even in the short term, due to the adoption of unexpected policies, especially regarding import taxation, which may impact economies of different profiles.
Initially, it was expected that protectionist measures would be aggressively implemented, but in practice, actions have been less intense than anticipated. As a result, currencies around the world have regained value. The Brazilian real, for example, which reached R$6.30 per dollar at the end of 2024, now fluctuates around R$5.70.
In addition to external challenges, Brazil faces internal obstacles, with inflation being the main concern. The IPCA, the country’s official index, has exceeded the target ceiling set by the National Monetary Council of 4.5%, while the central target is 3.5%. In January of this year, the accumulated 12-month index reached 4.56%.
Despite an apparent slowdown caused by a reduction in electricity prices—due to a bonus granted by Itaipu—inflation remains under pressure.
The rising prices of food and beverages, which have increased by 7.25% in a year, and the expected adjustment in fuel prices are likely to further drive inflation. Gasoline and diesel, the latter having a strong impact on the country’s logistics costs, are expected to weigh on budgets in the coming months. Additionally, starting in February, the impact of the energy bonus will no
longer be accounted for, which should contribute to another rise in inflation indices.
When inflation exceeds the target ceiling, the Central Bank responds by raising interest rates. Currently set at 13.25%, the Selic rate is expected to reach at least 14.25% by mid-March. Meanwhile, in the United States, the Federal Reserve (FED) has opted to maintain interest rates in the 4.25% to 4.50% range, increasing the interest rate differential between the two countries. With reduced uncertainties following Trump’s inauguration, Brazil’s high interest rates tend to attract more speculative capital, contributing to the appreciation of the real.
The appreciation of the Brazilian currency could be even greater if not for internal uncertainties, particularly regarding fiscal balance, a topic widely debated in BOMR throughout 2024. Last year, the federal government recorded a revenue collection record, totaling R$2.6 trillion. However, even with this increase, the country posted a deficit of R$11 billion, within the established target. The market, however, does not only observe current performance but also long-term projections. With rising interest rates and a potential economic slowdown, the trend is for expenditures to grow above revenue, expanding the deficit and increasing the debt-to-GDP ratio, which maintains investor distrust.
So far, the Brazilian economy has not significantly felt the effects of the interest rate hike cycle, which began in August of last year. The industrial sector, for example, grew by 1.8% in January and has accumulated a 3.1% increase over the past 12 months. Despite a 7% decline in the extractive industry, the manufacturing sector showed an
expansion of 3.5%.
In retail, 2024 ended with a 4.1% growth, driven by the strong performance of supermarkets (4.6%), pharmacies (14.2%), and vehicles (11.7%). This advance was supported by factors such as the unemployment rate, which reached its lowest historical level (6.2% in the last quarter of the year), increased disposable income, and the expansion of consumer credit, which grew by double digits.
The tourism sector also benefited from this scenario. According to a survey by FecomercioSP, the segment grew by 6.8% in December and
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IMPORTANT FACTS:
Despite rising interest rates for Brazilian families, the scenario remains healthy, with loan approvals increasing by more than 10% last year while default rates declined from 5.6% in December 2023 to 5.3% of the total credit volume, according to data from the Central Bank.
ended 2024 with an accumulated increase of 4.3%, reaching a record revenue of R$207 billion. Thus, the Brazilian economy remains heated. While this is positive for families and businesses, it also increases pressure on inflation and interest rates in the medium and long term, resulting in yet another cycle of unsustainable growth. The investment level in relation to GDP remains below ideal, limiting the country’s ability to expand supply and reduce inflationary risks when demand grows. Therefore, expectations are for an economic slowdown in the second half of the year, with possible impacts on employment and consumption.
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The IBGE continues to revise its projections for the 2025 harvest upwards, initially estimated at 311 million tons, now standing at 325 million, an 11% increase compared to 2024. Soybeans and corn are the highlights, with estimated increases of 14.9% and 7.8%, respectively. The latter refers to the second corn crop.
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According to a FecomercioSP survey on regional tourism, Bahia was the state with the highest growth last year at 11.6%, followed by Minas Gerais with a 10.1% increase. Conversely, Rio Grande do Sul suffered a 12.5% decline, evidently influenced by the floods that occurred in May.
CONFIDENCE INDEXES:
The Consumer Confidence Index (CCI) decreased by 1.7% in January compared to December, returning to 123.5 points, also below the level of a year earlier (133.2 points). The decline in optimism is directly associated with food inflation, which has burdened consumers’ budgets. Essential items such as meat, milk, coffee, and rice have been consistently rising, making household budgeting more challenging.
The Business Confidence Index in Commerce (ICEC) dropped by 2.6% in January, from 110.9 points in December to 108 points, the same level as the previous year. The trend is for business confidence to remain under pressure due to rising interest rates and the impact of inflation on household consumption, as well as the challenges posed by both the international and Brazilian economies.
Consumer Confident Index (ICC) and Comerce Businessman (ICEC)
Note: The CCI and ICEC range from 0 to 200. A level between 100 and 200 points is considered optimistic, while below 100 points is pessimistic.
Although these indicators are based on São Paulo, they reflect the trends seen across the rest of the country, as the city, Brazil’s largest, accounts for 11% of the national GDP.
TRAVEL AND TOURISM
While we rested during the holidays and year-end recess, Tourism did not stop and started 2025 with many sales – but also many challenges. The forecast for the year suggests tougher sales due to more expensive credit and a still high dollar, but the desire to travel remains strong. 2025 is already in full swing, with many airlines announcing more flights or international frequencies from Brazil to various regions.
LATAM AIRLINES
4 Latam announced new additions starting in July: São Paulo-Barcelona will increase from 4 to 6 weekly flights;
4 São Paulo-Madrid will increase from 10 to 14 weekly flights by August, then reduce to 12 per week from September;
4 In Italy, by June, the São Paulo-Milan route will increase from 5 to 7 weekly flights (daily service);
4 In Portugal, Latam will operate Fortaleza-Lisbon for the first time and, from May, will expand São Paulo-Lisbon from 7 to 9 flights per week;
4 In the U.S., the São Paulo-Orlando route will increase from 7 to 8 flights per week in June, reaching 9 weekly flights in July. However, during the low season, the company will reduce flights on the following routes:
4 São Paulo-Rome will decrease from 6 to 5 flights per week in March;
4 São Paulo-Johannesburg will be adjusted from 4 to 3 weekly flights in April, returning to 4 per week in June;
4 Fortaleza-Miami will drop from 3 to 2 weekly flights in April to allow Latam to operate the new Fortaleza-Lisbon route (April 7 and October 20).
4 Latam has also increased its operations to Argentina, including a daily flight between São Paulo and Bariloche in the winter.
GOL LINHAS AÉREAS
4 Gol announced flights from Belém (northern Brazil) to Miami, starting on June 15, operating on Thursdays and Sundays.
4 In Argentina, the airline announced that it will transfer most of its operations to Aeroparque, the regional airport in Buenos Aires.
SEE GOL’S SCHEDULE FOR ARGENTINA:
Buenos Aires: Seat availability will increase by 60%, reaching up to 16 daily flights between 13 Brazilian cities and the Argentine capital. Aeroparque (AEP) will gain new Gol flights to cities such as Porto Alegre, Brasília, Belo Horizonte/ Confins, Florianópolis, Fortaleza, Rio de Janeiro/Galeão, São Paulo/Guarulhos, Natal, Recife, and Salvador. Meanwhile, Ezeiza (EZE) will have connections with Rio de Janeiro/Galeão, Florianópolis, Porto Seguro, Brasília, Maceió, Fortaleza, and João Pessoa.
Cordoba: Gol plans to double capacity, with daily flights to RioGaleão from April 2 (currently four weekly) and the resumption of operations to São Paulo/Guarulhos with three weekly flights starting April 2. The Recife-Córdoba route will launch on April 12, 2025, with one weekly flight.
Rosario: A 10% increase in seat availability for Rio de Janeiro, the main Brazilian destination attracting Argentine travelers, with up to three weekly flights in each direction.
Bariloche: Between July 2 and August 29, San Carlos de Bariloche, a popular winter destination in Argentina’s Patagonia, will have direct and exclusive Gol flights to São Paulo/Guarulhos, operating three times a week (Mondays, Wednesdays, and Fridays).
AZUL LINHAS AÉREAS
4 Azul announced direct flights from Campinas (SP) to Porto, Portugal, and Montevideo, Uruguay.
The new European route will launch in June for the summer season, with three weekly flights to Porto using Airbus A330neo aircraft with a capacity of 298 passengers.
The Montevideo route will start in July, with five weekly flights operated by Embraer E2 aircraft with a capacity of 136 passengers.
4 Azul will also offer direct flights to Bariloche from Campinas, Belo Horizonte, and Porto Alegre, as well as to Mendoza from its hub in São Paulo’s interior, all during the winter season.
Reductions: The Recife-Orlando route will be reduced from three to two weekly flights, departing on Tuesdays and Fridays. Direct Recife-Fort Lauderdale flights have been suspended, and Azul now only offers connecting flights via Manaus, Belém, Belo Horizonte, and Campinas, citing seasonal adjustments.
TRAVEL TO SOUTH AMERICA
Exclusive data obtained by PANROTAS from ForwardKeys, in a report prepared for Embratur, shows which countries will send the most tourists to South America in 2025:
1. United States, with a 22.5% share and 4% growth;
2. Argentina, with a 12.6% share and a 73% increase, indicating Argentines are traveling again, while the country itself is losing tourists due to high costs;
3. Brazil, with an 8.3% share, down 25%, largely due to fewer trips to Argentina;
4. Chile, with a 7.8% share and 20% growth;
5. Spain, with a 5.4% share and 16% growth.
TOP 5 COUNTRIES SENDING TOURISTS TO BRAZIL (2025 PROJECTIONS):
1. Argentina
2. United States
3. Chile
4. Portugal
5. France
Full data will be in the PANROTAS Special Magazine for Fórum PANROTAS 2025 on March 10.
MOST ACCESSED TRAVEL WEBSITES
PANROTAS Magazine will also mark the beginning of a partnership with Similarweb, providing insights on Brazilian internet behavior throughout the year. Here’s a sneak peek at the 20 most visited Travel and Tourism websites in Brazil in 2024:
1. booking.com
2. uber.com
3. latamairlines.com
4. airbnb.com.br
5. tripadvisor.com.br
6. decolar.com
7. 99app.com
8. voeazul.com.br
9. aeroin.net
10. voegol.com.br
11. melhoresdestinos.com.br
12. localiza.com
13. clickbus.com.br
14. queropassagem.com.br
15. skyscanner.com.br
16. cvc.com.br
17. smiles.com.br
18. latam.com
19. hoteis.com
20. buser.com.br
The full data will be in the PANROTAS Special Edition for Fórum PANROTAS.
AZUL-GOL MERGER
Another major topic at the start of the year is the potential Azul-Gol merger. John Rodgerson, CEO of Azul, aims to create an airline with truly global competitiveness. The negotiations are being led by Abra, Gol’s parent company, which remains focused on exiting Chapter 11 bankruptcy, expected by mid2025.
BRAND USA REPRESENTATION CHANGE
The year also began with a new Brand USA representation in Brazil. Aviareps has been replaced by Interamerican Network, now responsible for trade and media relations.
U.S. VISA RENEWAL POLICY CHANGE
A surprising announcement from the U.S. Embassy reduced the visa renewal period to 12 months with-
out requiring an interview. If your tourist visa expired within the last 12 months, you may renew it without an interview. If it expired beyond that, you must go through the regular process, including a CASV visit and consulate interview.
U.S. VISA REQUIREMENT FOR BRAZIL
Starting in April, Brazil is set to reintroduce visa requirements for U.S., Australian, and Canadian citizens. If nothing changes, this marks a setback for Brazil’s international hospitality, although it is unclear whether the visa will be electronic.
TAX-FREE BRAZIL
A positive development for international tourists is the approval of a Tax-Free Program for foreign visitors. However, implementation is pending due to its connection with Tax Reform legislation.
This report is produced by PANROTAS and FECOMERCIOSP to support your business decisions. The contents are valuable assets to Destinations and Travel Organizations, both domestic as well as international. For further information please contact ri@ fecomercio.com.br redacao@panrotas.com.br
