Brazil: Indebtedness hits record high, reaching 3 out of 10 families

RIO DE JANEIRO, BRAZIL – The percentage of indebtedness hit a new record in April this year, reaching 28.6% of all Brazilian families. The index is 0.8% higher than the one registered in March and 4.3% more than April last year. The worsening has intensified over the previous three months.

The data were released by a report of the National Confederation of Trade of Goods, Services and Tourism, the CNC, on Monday 2.

Another record in April, according to the survey, is the 77.7% of families with outstanding debts, such as post-dated checks, credit cards, overdrafts, store credit cards, consigned credit, personal loans, car, and house payments. This rate was 10% lower, at 67.5% a year ago.

The survey notes the high inflation of 11.3% as the main cause for the increase in the need for credit to recompose income. The credit card is the most sought-after type of debt, even though it offers the highest costs, with 88.8% of these families.

Brazil also has 10.9% of families that declare themselves defaulters, unable to pay their bills or with debts in arrears that will remain unpaid. The percentage is 0.1% higher than the previous month, 0.5% higher than in April 2021, and the highest since December 2020.

The proportion of families declaring themselves as “very indebted” grew to 17.8%, the highest percentage since the beginning of the historical series, second only to July 2011. In March, the index was 17.6%, and in April 2021, 14.4%.

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