Business

Brazilians are drowning in debt, but rates will remain high

Financial data shows that families are struggling to make ends meet, which is particularly dangerous considering that borrowing costs will remain elevated

Brazilians are drowning in debt, but rates will remain high
A majority of Brazilians is in debt, the Central Bank finds. Illustration: Wan Wei/Shutterstock

Never has a larger share of Brazilians owed money. New data from the Central Bank shows that the country’s household indebtedness levels reached 53.1 percent in July, a new record (in the data series starting in 2005). Almost one-third of families’ monthly income is eaten up by debt payments.

This is the result of a combination of worsening economic conditions, with prices climbing at a fast pace while wages stagnate, and persistently high interests.

Since March 2021, Brazil has undergone one of the world’s steepest monetary tightening processes, with benchmark interest rates climbing from 2 percent a year to the...

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