By Brazil Stock Guide – Brazilian households remain under pressure from expensive credit, with consumers continuing to rely on short-term borrowing such as credit cards even as delinquency rates rise over the year, according to central bank data released Monday (27).
The figures show that the average interest rate on non-earmarked credit for individuals stood at 61.5% a year in March. The rate declined 0.4 percentage point from the previous month but remained at a level that continues to weigh on household finances.
Delinquency in total credit across the National Financial System reached 4.3% of the portfolio in March. That was down 0.1 percentage point from February, but up 1 percentage point over 12 months. Among households, delinquency rose to 5.3%, an increase of 1.4 percentage points from a year earlier.
Household indebtedness reached 49.9% in February, up 0.1 percentage point on the month and 1.3 percentage points over 12 months. Debt-service costs accounted for 29.7% of income, rising 0.2 percentage point from the previous month and 1.9 percentage points from a year earlier.
Credit to families continued to expand despite the higher cost of borrowing. The total credit portfolio in the National Financial System reached 7.2 trillion reais in March, up 0.9% in the month. Loans to households totaled 4.5 trillion reais, advancing 0.8% from February and 10.9% over 12 months.
In non-earmarked credit to individuals, the balance reached 2.5 trillion reais, up 1.1% in the month and 12.3% compared with March 2025. The central bank highlighted growth in credit-card purchases paid in full, payroll-deductible loans for private-sector workers and vehicle financing.
Earmarked credit to households, which includes lending lines governed by specific rules and funding sources, totaled 2 trillion reais. That represented growth of 0.5% in the month and 9.3% over 12 months.
Broader credit to the nonfinancial sector reached 21 trillion reais in March, equivalent to 162.3% of gross domestic product. The figure slipped 0.3% from the previous month, while increasing 11.2% over 12 months.
Broad credit to companies totaled 7.1 trillion reais, rising 1.5% in the month. The expansion was driven mainly by private debt securities, foreign loans and operations within the National Financial System.
No listed companies were cited in the original report, so there are no corporate tickers to include.
Brazil market raises 2026 inflation forecast to 4.86%
Brazil’s financial market raised its 2026 inflation forecast for a seventh consecutive week, adding pressure to expectations for monetary policy as the central bank keeps interest rates at restrictive levels.
The forecast was published Monday by Brazil’s central bank in its weekly Focus survey. Analysts now expect the benchmark IPCA consumer price index to end 2026 at 4.86%, up from 4.80% a week earlier and 4.31% four weeks ago.
Inflation expectations for the following years were left at 4% for 2027 and 3.61% for 2028, according to the survey.
Brazil’s official inflation accelerated in March, with the IPCA rising 0.88% after a 0.70% increase in February. The move was driven by higher prices for transportation and food. In the 12 months through March, inflation stood at 4.14%, according to data from the Brazilian Institute of Geography and Statistics.
The Focus survey also showed markets expect the Selic benchmark interest rate to end 2026 at 13%, unchanged from the previous week but above the 12.5% estimate made four weeks earlier. The central bank’s monetary policy committee currently sets the Selic at 14.75% per year.
For 2027 and 2028, analysts forecast the Selic at 11% and 10%, respectively. The rate had previously reached 15%, its highest level since July 2006, when it stood at 15.25%. Between September 2024 and June 2025, policymakers raised borrowing costs seven times in a row.
The market slightly lowered its estimate for Brazil’s gross domestic product growth in 2026 to 1.85%, compared with 1.86% in the prior survey. For 2027, analysts expect GDP to expand 1.80%, while the 2028 forecast points to growth of 2%.
Currency expectations also shifted. Analysts now see the US dollar ending 2026 at 5.25 reais, down from 5.30 reais in the previous week and 5.40 reais four weeks earlier. For 2027 and 2028, the Focus survey projects the dollar at 5.35 reais and 5.40 reais, respectively.
No publicly listed companies were cited in the original report, so no equity tickers apply.
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