High inflation weighs on Brazilian families’ budgets and boosts default in 2021
RIO DE JANEIRO, BRAZIL – “Even if the effect of the interest rate hike on inflation is not that clear, inflation rates tend to slow down, as seen in the IGP-M, also released today by IBRE, although this is not the official inflation index,” said Boa Vista (BOAS3).
Last year, the SELIC rate increased from 2.00% to 9.25%. According to Boa Vista, this rise pushed the interest rate for households up 7.92 percentage points and closed 2021 at 45.12%.
According to the company, the largest share of this increase came from the cost of funding, which rose 5.20 percentage points over the past year.
On the other hand, the concession of free credit to families registered another sharp rise in the annual comparison, of 16.72%, closing 2021 up 20.16% compared to 2020.
“However, the 9.9% drop between November and December in the Central Bank’s seasonally adjusted data series calls for caution, something that may anticipate a slowdown in lending for 2022,” says the credit company.
2022
According to Boa Vista, the trend is for defaults to continue gradually rising because of a still very challenging scenario for consumers.
“Declining income, high indebtedness, and rising interest rates for families are all factors that may increase defaults,” the company said.
Finally, the company expects credit concession to increase, but at a slower pace than currently, given the expected lower consumption capacity.
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Live Market IntelligenceBrazil — Live Market Board
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Brazil — Live Market Board
+1.38%
209,066.90
+1.38%
66,048.57
+1.63%
11,044.42
+0.18%
2,828,027
-0.16%
2,531.15
+0.21%
59,610.00
+2.26%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 209,066.90 | +1.38% | +21.85% | 206,220.24 | 168,310 | 167,142 | — |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
| SELIC | 14.00% | — | — | — | — | — | |
| PETR4 | 41.64 | -0.05% | +35.19% | 41.66 | 41.97 | 41.15 | 41,499,400 |
| VALE3 | 72.97 | +0.83% | +30.75% | 72.37 | 73.54 | 72.66 | 17,658,000 |
| ITUB4 | 38.60 | -1.03% | +4.57% | 39.00 | 39.34 | 38.39 | 29,487,800 |
| BBDC4 | 16.85 | +0.36% | +3.50% | 16.79 | 16.90 | 16.67 | 19,416,900 |
| BBAS3 | 19.37 | +0.47% | +0.73% | 19.28 | 19.44 | 19.16 | 11,069,200 |
| B3SA3 | 14.26 | -0.21% | +12.73% | 14.29 | 14.47 | 14.11 | 33,037,800 |
| ABEV3 | 14.89 | -0.80% | +21.91% | 15.01 | 15.07 | 14.81 | 16,453,100 |
| WEGE3 | 47.59 | +0.49% | +29.99% | 47.36 | 48.08 | 47.36 | 3,364,600 |
| PRIO3 | 59.14 | -0.19% | +50.67% | 59.25 | 59.81 | 58.74 | 3,325,600 |
| SUZB3 | 41.33 | +2.35% | -23.55% | 40.38 | 41.48 | 40.35 | 3,914,900 |
| RENT3 | 34.68 | -0.09% | +0.84% | 34.71 | 34.96 | 34.35 | 7,979,100 |
| AZZA3 | 15.89 | -2.63% | -53.76% | 16.32 | 16.42 | 15.82 | 1,330,300 |
| CSNA3 | 4.30 | +0.47% | -42.65% | 4.28 | 4.41 | 4.26 | 10,076,100 |
| GGBR4 | 24.69 | +2.19% | +51.38% | 24.16 | 24.85 | 24.18 | 7,047,600 |
| ENEV3 | 24.21 | -1.38% | +70.49% | 24.55 | 24.64 | 23.99 | 9,297,000 |
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