Brazil may offer visitors thrills, but there's nothing cheap about it

Brazil-realRIO DE JANEIRO -- For those still clinging to the notion that South America provides cheap, exotic experiences for foreign visitors, arriving in Brazil these days can be a bit of shock.

Sao Paulo and Rio de Janeiro, the country's biggest cities, are more expensive for the outsider than  any city in the United States, as well as some of Europe's pricier travel destinations.

According to the 2012 Worldwide Cost of Living Survey published last week by Mercer, a global consulting firm, Sao Paulo is the world's 12th-most expensive city for expatriates, followed by Rio at 13. London is 25 and New York City, the highest-ranking U.S. location on the list, is 33. Los Angeles lags behind at 68.

Tens of thousands of foreigners have descended on Rio over the last few weeks in preparation for the United Nations Conference on Sustainable Development, which started Wednesday, and many are finding their money isn't worth so much here these days.

“Even after being warned that Brazil is expensive now, I never expected this,” said Lisa Curtis, a media relations officer from Oakland who is attending the conference for a environmental group. She dined Tuesday on a personal pan pizza she bought for $15, or 29 reals, but it was so small it left her hungry, she said. “Even the best bargains I've found here are no better than the prices we have back home,” she said.

Her delegation opted to stay at a hostel, with 12 people sharing a room.

Although prices for some items, such as lodging, have been inflated because of the U.N. conference, members of  Brazil's increasingly large expatriate community have long been used to watching their money fly away. This correspondent spends about $200 a month on basic phone and BlackBerry service, about four times as much as he did in London a few years ago.

Brazil's economy has grown robustly in the last decade, and a unique macroeconomic mix meant it  sucked in plenty of investment after the 2008 crisis. That pushed up the value of the real against the dollar. Then there are the high taxes and infrastructure bottlenecks, which push prices up further.

Brazil's economy has slowed almost to a halt in recent months, partly because the high cost of the country's exports has stalled manufacturing growth and the currency has come back down some against the dollar. Still, for American visitors Brazil often feels more expensive than back home.

Sao Paulo and Rio dropped slightly from their positions on last year's list, which placed them at 10 and 12, respectively. This year one other Latin American city -- Caracas, Venezuela -- also ranks above any U.S. city, at No. 29.

The Mercer survey looks specifically at the cost of living for foreigners, which may differ from that for locals. The prices include rent, education and restaurants -- items for which many locals are able to hunt for bargains.

That may explain the high ranking of Luanda, the capital of Angola, where Western-style offerings are reportedly sparse and out of the reach of most Angolans. Even in the poorest parts of Sao Paulo or Rio, however, it's easy to find pizza. Just not for cheap.

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-- Vincent Bevins

Photo: Brazilian 10- and 20-real notes are arranged for a photograph in Rio de Janeiro. Credit: Dado Galdieri / Bloomberg

 
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