Dec. 19 (Bloomberg) -- Brazil’s consumer-loan default rate fell in November for the first time in five months as the government pushes banks to reduce interest rates.
The consumer default rate fell to 7.8 percent from 7.9 percent in October, the central bank said in a report distributed today in Brasilia. Interest rates to consumers fell to a record 34.8 percent.
President Dilma Rousseff’s administration has sought to spark consumption amid faltering growth by reducing the benchmark interest rate to a record low, urging banks to reduce borrowing cost to clients and pushing state-owned financial institutions to boost credit. Policy makers announced this month plans to further cut interest rates on loans from the national state development bank.
State-owned Caixa Economica Federal will increase housing financing by 20 percent next year, CEO Jorge Hereda said in a Dec. 4 interview. The bank will have 85 billion reais ($41 billion) in financing for low-income homes through 2014, he said.
Brazil’s average rate on loans fell to 28.9 percent in November from revised 29.4 percent in October. Rates on corporate loans fell to 21.7 percent from 22.1 percent.
Outstanding credit rose 1.5 percent in November to 2.3 trillion reais, the central bank said today.
Brazil’s economy expanded 0.6 percent in the third quarter, half the pace forecast by economists, the national statistics agency said Nov. 30.
More recent economic reports suggest that economic activity is picking up. Brazil’s economic activity index, a proxy for gross domestic product, rebounded more than analysts expected in October. Retail sales in October rose at the fastest pace in three months, as consumers increased purchases of computers, furniture and appliances.
Brazil is creating conditions necessary to grow at least 4 percent next year, Finance Minister Guido Mantega said earlier this month. Brazil’s economy is forecast to grow 1 percent this year and 3.4 percent in 2013, according to a central bank survey published this week.
To contact the reporter on this story: Matthew Malinowski in Brasilia at email@example.com
To contact the editor responsible for this story: Joshua Goodman at firstname.lastname@example.org