São Paulo – Brazil welcomed over 1.4 million international tourists in January 2025, generating USD 805 million for the country’s economy, according to data from the Central Bank of Brazil compiled by the Ministry of Tourism. This marks the best January of the decade. Each foreign tourist spent an average of USD 2,000 on their trip. "We have a huge room to grow even more in international tourism revenue coming to Brazil. Our work, in partnership with Embratur, is to attract these travelers, who are seeking authentic experiences, to discover everything we have to offer," highlighted Celso Sabino, Minister of Tourism. Embratur is the Brazilian Agency for the International Promotion of Tourism.
Tourism has been growing steadily over the years within the country. Last year, the amount spent by international tourists in January was USD 801 million, reflecting a 32% rise compared to 2023 when spending recorded for the same period was USD 604 million.
Meanwhile, Brazil's job market has shown signs of slowdown, with the unemployment rate rising to 6.5% for the quarter ending last January, higher than the preceding 6.2% and 6.1% rates recorded. This upward trend points to troubling figures associated with IGBE data—specifically, the country recorded only 137,000 job openings, down from last year's 173,000 positions, indicating more than 20% drop. Minister Luiz Marinho attributed this contraction to increased interest rates. "I believe the fall in the pace of new job positions is an effect of higher interest rates. The rise inhibits investment and strangles the public budget," he said.
The Selic rate acts as Brazil’s basic interest rate, influencing the economy’s business dynamics. After peaking at 13.25%, the Central Bank is expected to increase the Selic again come March 2025. With higher interest rates, loans and financing typically become more expensive, prompting businesses to curtail investments and purchases, which could stagnate growth. According to Weslley Cantelmo, president of the Economias e Planejamento Institute, the economic slowdown certainly reflects entrepreneurs' hesitance to invest, causing projects to stall and preventing jobs from materializing. "The strongest increase in interest rates began in December. This will only have an impact in mid-2025," said economist José Luis Oreiro, reinforcing the negative correlation between interest rate hikes and job creation.
On the market side, the Ibovespa index closed down by 1.60% on the last trading session, ending at 122,799 points, influenced by the MSCI Brazil rebalance and the nervousness around the Carnival holiday. Throughout the day, the index fluctuated between 122,659 and 124,916 points, indicating volatility stemming from investor sentiment and external factors.
Corporate actions like the one taken by Hidrovias do Brasil have also made headlines recently. The firm has announced plans for R$ 1.2 billion capital increase to address leverage concerns, which have troubled the markets. The company will issue 600 million new shares priced at R$ 2 each, closely aligning with its current market price of R$ 1.98 per share. The opportunity to inject capital is expected to drive down its leverage to approximately 2.8x by year’s end—important for upcoming negotiations with bondholders who issued waivers following unsustainable leverage figures earlier this year. A source close to the company noted, "One of the main value levers Hidrovias has is debt reduction."
Hidrovias aims to use this influx of capital not solely to pay down debt but also to expand operations within its key North Corridor, which has been deemed the company's flagship project. This capital raise initiative follows several steps to maintain stability; previously, Grupo Ultra, which owns 40% of Hidrovias, invested R$ 500 million just months before as part of the effort to restructure the company’s financial status.
This latest announcement stands as the second attempt by Hidrovias to garner capital; their first endeavor was canceled last December due to unfavorable market conditions. Observers speculate about possible future asset sales as the firm refocuses on its core business sectors. Still, the intention remains to stabilize without divesting other strategic properties for now.
Brazil's economic environment remains complex, with rising interest rates impacting the overall investment climate, and sectors like tourism providing lifelines amid corporate shakeups and fluctuated employment statistics. Despite signs of struggles, the current low unemployment rate of 6.5% still qualifies as the lowest ever recorded for January by IGBE, presenting paradoxical signals of stability against the backdrop of rising challenges.