Brazilians' 'fanatical' travel to US helps drive Brazil's economic boom
Brazil's new middle class, by spending record numbers on consumer goods and services like travel, is attracting investment and international business to the country, fueling its growth.
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So what are they buying? Just about everything. According to the study, the new middle class spends around 31.5 percent of their yearly budgets on expenses for the home, which include bills, repairs, and big purchases like TVs and computers. They spend about 23 percent of yearly budgets on services, including beauty salons, housekeepers, and government services. About 18.5 percent is spent on food and drink. A few other interesting numbers: the C Class is responsible for 48 percent of supermarket purchases and 60 percent of beauty salon expenditures; members of the C Class make up 70 percent of Brazilian credit card holders and 80 percent of Brazilians who access the Internet. For the new middle class, two of the main aspirations for purchases are cars and homes.Skip to next paragraph
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One of the most notable consumption trends in the new middle class is travel – now more than ever, Brazilians are going abroad and are spending billions. As the US Ambassador Thomas Shannon noted at the Council of the Americas conference in São Paulo this week, "Brazilians travel with almost fanatical zeal to the US." In the first six months of 2011, Brazilians spent $10.2 billion abroad, an all-time record and a 44 percent increase from the same period the year before. This June alone, Brazilians spent $1.8 billion on international travel. Many travelers are coming to the US, much to the delight of embattled retailers. Miami is a popular shopping destination, and in 2010, 550,000 Brazilians visited the Florida city, spending $1.1 billion there. Some even come with actual shopping tours. Wealthy Brazilians are buying up Miami real estate; as one broker told The New York Times, “The Brazilians walk in, they don’t even negotiate.... It’s a no-brainer for them.”
But with this massive group of new consumers whipped up in a spending frenzy, debt is a real problem, and luckily the government is concerned. Ensuring education about credit and expanding unemployment insurance, amongst other measures, will be key in the sustainability of development, noted an EXAME article this week. Also, The Guardian revealed new consumer debt numbers this week: