Number 58 August/2026
INDEX 03
Main Facts
05
Confidence Indexes
06
Travel and Tourism
MAIN FACTS Brazil is experiencing an economic paradox. The latest figures appear encouraging at first glance — July inflation was just 0.07%, the lowest result of the year, while the 12-month accumulated rate fell to 4.44%, back within the 4.5% inflation-target ceiling. Food prices, the main burden on household budgets, fell 0.67%, with sharp declines in items such as tomatoes (-29%) and lower prices for meat and coffee. Fuel prices also helped, with declines in gasoline, ethanol and diesel. But this apparent improvement masks a fragile structure: the economy is being sustained by fiscal stimulus and credit expansion, pillars that cannot be maintained indefinitely. The debt-to-GDP ratio has already reached 82%, on an upward trajectory with no sign of being brought under control. This is pushing up long-term interest rates and compromising the country’s ability to invest in the future. The question is: how long can this equation remain sustainable? On the international front, even with the resumption of conflicts in Iran following the signing of the peace agreement, the issue has lost some of the intensity seen in previous weeks. Oil prices are fluctuating between US$80 and US$90 — still a burden, but without the extreme uncertainty that characterized recent months, bringing greater predictability to prices. Even so, the elevated level is maintaining a global inflationary environment that is likely to keep interest rates high in the major economies. Domestically, however, easing inflation over the past two months has opened limited room for cuts in the Selic rate. Against this backdrop, the Central Bank cut the Selic rate by another 0.25 percentage point, bringing it down to 14% a year — the fourth consecutive cut, all at the same cautious pace. The decline has been very gradual, and there is little room to accelerate: further cuts will depend on the fiscal scenario and the trajectory of inflation. The expectation at the beginning of the year that the Selic rate could reach 12% has
been abandoned — the market no longer expects that level, but rather something close to 14%. And it is precisely on the fiscal front that the problem lies. The government continues to expand spending during an election year: public debt reached 82% of GDP, compared with 75% in the same period last year — a seven-percentage-point increase in 12 months. Consumer incentive programs, such as Move Brasil, and rounds of debt renegotiation are supporting economic activity in the short term, but increasing investor distrust. The exchange rate reflects this tension: on the one hand, still-high interest rates attract speculative capital and support the Brazilian real; on the other, the election scenario and fiscal deterioration are beginning to put pressure on the currency, which is once again fluctuating around R$5.20 per US dollar. In terms of economic activity, the latest data for June showed retail sales up 4.9%, strongly influenced by the Move Brasil program: vehicle and motorcycle sales jumped 11.6%, household appliances rose 9.4%, and supermarket sales increased 2.2%. In the Monthly Services Survey, growth was 2%, while industrial output advanced 1.7%. Another figure that reinforces the fragile picture is the record R$247.6 billion in household credit more than 90 days overdue, according to FecomercioSP. According to the CNC, 82% of Brazilian households have some form of debt — an all-time record. Online sports betting is likely contributing to this financial imbalance, consuming part of household budgets that would otherwise go toward consumption or debt repayment. It is a dangerous cycle: the government stimulates credit to boost the economy, but households are already at the limit of their indebtedness. Tourism continues to perform at a stronger pace. The sector posted another record in June, generating R$22.5 billion in revenue, up 2.1%, driven by air transportation, which grew 5.5%. Accommodation declined slightly by 0.2%, which may be related to the impact of the World Brazilian Overview Monthly Report - July 2026
3
Cup on the calendar. Part of the overall performance, however, is explained by higher airfares, a direct result of rising jet fuel costs. The second half of the year remains filled with uncertainty. The election calendar is likely to delay important decisions and encourage further public spending, as the government continues its strong fiscal expansion without signaling an adjustment. Externally, global tensions show no signs of easing: the return of the war in Iran and the 25% tariffs imposed by the United States on Brazilian products add layers of risk beyond the country’s control. Domestically, companies still need to adapt to the regulations of the Tax Reform and are dealing with uncertainty surrounding discussions about changes to working
hours and schedules. This combination — high interest rates, war, tariffs, tax reform, labor changes, and electoral and fiscal uncertainty — is causing businesses to hold back on investment. When those who produce and create jobs lack predictability, the economy slows down. And that is precisely what we are seeing: increasingly modest economic activity indicators, consumption constrained by debt and expensive credit, and a productive sector operating cautiously. Brazil has the size and potential to grow well above the global average, but it continues to waste this opportunity — and ultimately, the cost falls on Brazilian workers, who see their real incomes shrink while the conditions for entrepreneurship and investment deteriorate.
IMPORTANT DATA:
1
2
3
Inflation: The 0.07% increase brought the 12-month accumulated rate down from 4.64% to 4.44%, back within the 4.5% limit. Food prices fell 0.67% (tomatoes -29%, with meat and coffee also declining), while fuel prices fell (gasoline -1.37%, ethanol -2.26%). In the opposite direction, electricity prices rose 3.09% due to tariff adjustments, while airfares increased 11.67%.
Retail: The government’s financing program for appbased drivers and taxi drivers, with a R$30 billion credit line through BNDES at reduced interest rates, helped drive June retail sales up 4.9%. Vehicle and motorcycle sales jumped 11.6%, while household appliances rose 9.4%. The effect is significant, but artificial — once the stimulus ends, the question is whether consumption will remain sustainable.
Agricultural harvest: IBGE revised its July estimate upward to 353 million tonnes of grain, up 2% from 2025 and 1.6% above the June estimate. Soybean production remains at a historic record of 174.9 million tonnes. The risk lies in the next harvest: the Super El Niño could alter rainfall patterns and compromise 2027 production, putting pressure on food prices.
IMPORTANT FACTS:
Brazilian Overview Monthly Report - July 2026
4
JUNE/2026 LATAM Macro Data Resume
Argentina
Brazil
Chile
Colombia
México
Peru
Unemployment rate
7,80%
5,40%
9,40%
8,00%
2,80%
4,90%
Basic interest rate
25,80%
14,00%
4,50%
12,00%
6,50%
4,25%
Inflation (LTM -Oct*)
33,80%
4,44%
4,50%
6,03%
3,12%
4,10%
*LTM - Last Twelve Months
Legend: Green, Red and Black The data get better, worse and equal than the previous month.
CONFIDENCE INDEXES: • Consumer Confidence (ICC): The ICC fell 2% in July, from 124.1 to 121.6 points, but was still up 11.6% year over year. Households continue to struggle to balance their budgets following higher prices earlier in the year and elevated interest rates. However, milder inflation in recent months could pave the way for an improvement in the coming periods. • Retail Business Confidence Index (ICEC): The ICEC was virtually unchanged in July, at 93.9 points, and remains in pessimistic territory. It is down 8.7% year over year. Businesses are experiencing higher delinquency, while high interest rates remain a major obstacle to consumption. With elections approaching, political uncertainty is increasingly weighing on business sentiment. Consumer Confident Index (ICC)(ICC) and Commerce Businessman (ICEC) Consumer Confident Index and Comerce Businessman
(ICEC)
150 140 130 120 110 100 90 80
ICC
jul/26
fev/26
set/25
abr/25
nov/24
jun/24
jan/24
ago/23
mar/23
out/22
mai/22
dez/21
jul/21
fev/21
set/20
abr/20
nov/19
jun/19
jan/19
ago/18
mar/18
out/17
mai/17
dez/16
50
jul/16
60
fev/16
70
ICEC Note: The ICC and ICEC range from 0 to 200. A score between 100 and 200 is considered optimistic, while below 100 is considered pessimistic. Although the indicators refer to the city of São Paulo, they follow the broader trend across Brazil, as the country’s largest city accounts for 11% of national GDP..
Brazilian Overview Monthly Report - July 2026
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TRAVEL AND TOURISM
The IDET PANROTAS (Economic Tourism Performance Index) for July was the strongest since the series began in March this year, showing stronger sales across all three verticals — Airline Consolidators, Tour Operators and TMCs: 87.88% of the 33 participating companies sold more than they did in July 2025. Average growth among companies that increased sales was 28.31%, while the minority that declined recorded an average drop of 12%, indicating that even those that lost sales experienced a smaller decline
than in previous months. Confidence in the current situation jumped significantly. The share rating the scenario as “Good” or “Very Good” reached 57.57%, a significant recovery after June’s low. Staffing levels also improved: 57.58% of companies ended July with more employees than a year earlier, the best result since April. Looking ahead, 48.48% of business owners expect the scenario to be “Better” or “Much Better” over the next six months, while only 12.12% expect conditions to deteriorate.
Brazilian Overview Monthly Report - July 2026
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BY VERTICAL Tour Operators stood out. For the second consecutive month, tour operators topped the IDET PANROTAS in sales: 90.91% of companies sold more than in July 2025, matching June’s result. Average growth among companies that increased sales was 23.64%. The only company that reported a decline fell 25% — the sharpest negative result among all verticals for the month, suggesting that pressure was concentrated in isolated cases. Airline consolidators regained momentum in July: 81.82% of companies sold more than in July 2025, with average growth of 30.84%, the best result for the vertical since March. For the fourth time this year, no consolidator reported a decline in margins during the month. 72.73% ended the month with higher margins than a year earlier. This vertical reflects the behavior of air-ticket consumption in Brazil. Check the IDET PANROTAS every month at the PANROTAS website.
is always a reason for everyone to slow down their plans and wait for the outcome of the vote. In addition, higher airfares and uncertainties surrounding company closures, such as Machu Picchu Brasil, and the travel insurance sector — following the regulator’s suspension of insurer Generali — are contributing to increased market concerns. Braztoa, the association representing tour operators, has raised two important alerts: the return of sales of flexible packages, in which travelers do not choose the date or suppliers, a practice that is prohibited in Brazil; and the sale by a national tour operator of air tickets for 2027 and 2028, which is also prohibited because airlines publish their schedules only one year in advance. These practices, in addition to representing a lack of ethics in the market, highlight the absence of government oversight or commitment. The government should regulate and supervise the sector.
https://www.panrotas.com.br/idet/
IN
The IDET PANROTAS is an initiative by PANROTAS to disseminate high-quality information on sector performance, helping companies, destinations, students and organizations interested in the sector monitor this high-potential industry in Brazil. The index is calculated monthly based on 33 of the largest companies in the sector, 11 in each of the Consolidators, Tour Operators and TMCs verticals. THE MARKET AT MID-YEAR
• Premium products offered by airlines • Luxury travel to Europe • Embraer aircraft, which will join the LATAM fleet at the end of the year and are already operated by Azul. The Abra Group is also expected to add Embraer aircraft to its fleet. • The transfer of more than 100 employees from Flytour Consolidadora to Sakura, led by Luti Guimarães • Change in leadership at GOL: Celso Ferrer leaves, while André Fehlauer (formerly of Livelo) becomes CEO and Albert Perez becomes president.
Brazilian tourism enters its strongest sales period — the final months of the year — OUT concerned but confident. Brazil is one month • Complicated visa or entry processes away from the presidential election, which • Destinations with nearby conflicts or wars Brazilian Overview Monthly Report - July 2026
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• Lack of transparency in tourism contracts and relationships with suppliers • Lack of government oversight • Higher airfares, with no forecast of a decline until 2027 EXPECTATIONS FOR BRAZIL • GOL’s new international destinations, which are expected to become daily services in 2027 • Disney’s promised openings in the United States and around the world (2027) • The launch of LATAM flights operated with Embraer aircraft (beginning thos year)
• The new map of luxury destinations for 2027 — preferably with suggestions that avoid crowds, extreme weather conditions and fake or low-quality products • The end of the war in the Middle East and the return of the important Doha and Dubai hubs, which need to restore Brazilian travelers’ confidence in these destinations and connecting airports • Legislators and politicians who support tourism in key positions in the new government, regardless of who wins the 2026 election.
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.