A third of families have debt in arrears and inflation is the main cause, says FGV

One in three Brazilian families has debts in arrears, and high inflation is identified as the main factor for these expenses not being paid on time, according to a special survey carried out by FGV Ibre (Brazilian Institute of Economics of Fundação Getulio Vargas).

Delinquency reaches 58% in families with an income of up to R$2,100 and drops to 10% in those with earnings above R$9,600.

In the lower income bracket, the difficulty of finding a job is pointed out as the main factor that leads to default. In all other bands established in the survey, inflation appears as the main problem.

3,525 consumer informants were consulted from January 3 to 22.​

If only delays of more than 30 days are considered, non-payment affects 21% of families. It is the highest rate ever recorded in Ibre surveys carried out since 2012. In 2018, for example, it was 14%.

If credit from the financial system is used, which considers debts overdue for more than 90 days, the default rate is 17.5% in the lowest income bracket and 1.8% in the highest.

“There was an increase in inequality during 2021. We had an interruption of emergency aid, it is difficult to return to the job market, and the service sector did not resume hiring as we expected”, says Viviane Seda Bittencourt, coordinator from consumer surveys by FGV Ibre.

She says that the beginning of the payment of Auxílio Brasil, a substitute for Bolsa Família, helped to improve the expectations of the poorest population, but it was not enough to organize the financial lives of families, remembering that the number of beneficiaries of emergency aid was much greater. .

Rodolpho Tobler, coordinator of trade and investment surveys at FGV Ibre, says that the job market reacted well in relation to the number of vacancies and the unemployment rate, but the population’s real income was eroded by the rise in prices. “Inflation is being the big villain. Credit is expensive, inflation is still high and the job market hasn’t reacted enough to compensate for it.”

According to information from the credit protection company Serasa, default in the country reached 64.82 million Brazilians at the beginning of this year. The number approaches the record of defaulters of the pandemic. In April 2020, there were 65.9 million in debt.

The total amount of debt increased from R$258 billion to R$260.7 billion. Serasa is holding an emergency Clean Name Fair until the 31st of this month.