Indebtedness, default among Brazilians up in August

Indebtedness and default facing Brazilian households increased in August. Indebtedness reached 19.4 percent—up 0.5 percentage points from the previous month and up 1.2 percentage points from August last year. Default affected 29.6 percent of all families in the country—the highest in the time series initiated in 2010.

The figures were released today (Sep 5) by national trade and services confederation CNC.

The survey also showed an increase in the direct credit demanded for retail among low-income families. In the last four months, indebtedness stemming from payment booklets for this section of the population grew 1.8 percentage points and reached 19.8 percent.

The rise was sharper among households with an income of up to 10 minimum wages (1.1 percentage points) than for those with a higher income (0.9 percentage points).

Izis Ferreira, the CNC economist in charge of the study, said the improvement in the labor market and more robust cash transfer policies benefited families in lower-income groups, but they still face difficulties. “Still-high inflation challenges the purchasing power of these consumers. Credit has been a vital way for them to sustain consumption,” she pointed out.