Brazil’s Growing Household Debt Remains Below U.S. Ratios

The National Confederation of Trade in Goods, Services, and Tourism (CNC) reports an increase in Brazilian household debt from November to December 2023.

However, there was a small decrease in the number of late payments. 2023 was the first year since 2019 to see a drop in yearly debt.

Still, as the CNC’s Consumer Indebtedness and Delinquency Survey shows, the delinquency rate almost reached one-third of the population.

In December 2023, 77.6% of families had bills due, up from 76.6% in November. This rate is lower than December 2022’s 78.0%.

CNC’s Chief Economist, Felipe Tavares explains that debt is crucial for economic growth, as credit fuels capitalism.

He adds that delinquency often results from low income and economic instability in Brazil. The CNC defines debt as any unpaid bill.

This includes credit cards, overdrafts, store payments, payroll loans, personal loans, post-dated checks, and payments for cars and houses.

Despite the rise in household debt at 2023’s end, Brazil’s debt-to-GDP ratio was about 30%. This is less than the 73% in the United States.

The percentage of people with overdue payments dropped slightly, from 29.0% in November to 28.8% in December 2023. In December 2022, this number was 30.0%.

The number of families unable to pay their overdue bills fell from 12.5% in November to 12.2% in December 2023, still above December 2022’s 11.3%.

In 2023, 77.8% of the population had debt, a small decrease from 2022. The CNC sees this as a positive, despite eight in ten Brazilians being in debt.

The yearly delinquency rate rose from 28.9% in 2022 to 29.5% in 2023. The average number of people unable to pay their overdue bills increased from 10.7% to 12.1%.

The CNC supports programs like Desenrola for restructuring debt. This program helped reduce the delinquency rate from 13% in October to 12.2% in December.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error