RIO DE JANEIRO, BRAZIL – A report by the United Nations Development Program (UNDP), an institutional arm of the UN, shows a worrisome debt scenario in Brazil.
The study shows that seven out of ten Brazilian families got into debt during the pandemic, and 43.2% of these families are not expected to be able to honor their financial commitments.
As a result of this scenario, Brazil’s economy will face “various economic and social challenges, since many of these people may face difficulties entering or remaining in the consumer market.
The study also suggests the urgent and effective action of the public power in an attempt to relocate these consumers in the labor market to pay off the debts incurred.
The document shows that the increase in family income becomes the only solution to face the effects of “over-indebtedness”.
“Thinking about citizen reallocation in the consumption market benefits the country’s development and human development – in dimensions that go beyond economic impacts,” said UNDP’s Deputy Resident Representative, Carlos Arboleda.
To assist the economic recovery of Brazilian families, UNDP developed a project together with the National Consumer Secretariat (Senacon).
After the study’s conclusion, twelve recommendations were presented to public agencies to tackle the ‘endemic’ indebtedness in the country.
The first proposal suggests regulating a nationwide financial education program, with projects aimed at young people in schools, the general population, and vulnerable groups.
Other suggestions such as debt rescheduling and the definition of steps and rites by the public authorities also appear in the work produced by UNDP and Senacon.