This figure represents an increase of 0.1 percentage points over the month and 1.3 percentage points over 12 months. The monetary authority’s report also notes that Brazilian households’ debt-to-income ratio reached 29.7%. This figure also marks a record high in the historical series that began in March 2011.
Meanwhile, the average total interest rate charged by banks on revolving credit card debt fell from 435.9% per year in February to 428.3% in March.
This type of credit is the most expensive line of credit in the financial market and is one of the main drivers of the population’s delinquency rates in the country.
The indebtedness of Brazilian households is a matter of concern for the Planalto Palace, especially in a general election year, when Brazilian President Lula da Silva is running for reelection.
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Government officials believe that the Brazilian economy’s strong performance is not translating into tangible benefits for the general public.
Currently, Lula da Silva’s economic team plans to launch a new debt renegotiation program for low-income individuals, similar to the one in 2023, with a focus on credit card debt.
Called Desenrola 2.0, the program is expected to be announced later this week, according to Finance Minister Dario Durigan, who spoke today after a meeting with bankers. The goal, he said, is to secure discounts of up to 90% on debts and a significant reduction in interest rates.
