91 million Brazilians to default on their bills in April

Around 91 million Brazilians (58 percent of the country’s adult population) are on default, according to a study by the Locomotiva Institute. On average, Brazilians have four defaulted bills — with low-income households likely to skip utility bills such as electricity and water, as well as rent. Among upper-middle- and upper-classes, credit card bills, and school tuition are the ones that have the highest probability of not being paid.

In March, the rate of adult Brazilians on default was 54 percent lower — with 59 million people with unpaid bills. “Covid-19 reached Brazil after a long economic recession — and found a population without savings,” said Renato Meirelles, Locomotiva Institute’s chief operating officer, to Estadão.

Much of the Brazilian population can’t save money. According to the Brazilian Institute of Geography and Statistics, Brazil’s most deprived families spend two-thirds of their income on basic necessities: food, housing, and clothing. The wealthiest families spend only one-third on these needs. They also spend over a third on other things, such as entertainment, culture, or private retirement plans. Spending on education and transport becomes larger as income increases. 

As we explained in our April 17 Daily Briefing, the coronavirus crisis could push over 5.7 million Brazilians below the extreme poverty line.

• #outbreak
• #recession