Household indebtedness and income commitment set record, says BC

The indebtedness of families and the income commitment of Brazilians are rising and hit a record, according to data released by the Central Bank this Tuesday.

In September, the most recent data, the balance of debts of families corresponded to 49.4% of the accumulated income in 12 months. The increase was 0.7 percentage points in the month and 5.5 points in the year.

And the average amount spent by Brazilians to pay debt service was 26.2%, an increase of 0.5 point in the month and 1.7 point in the year. The two indicators are the highest in the historical series started in 2005.

For the deputy head of the Central Bank’s Statistics department, Renato Baldini, the increase in the indicator itself is not necessarily a bad thing.

“The rise may reflect real estate expansion, for example. A family that moves from a rented apartment to a financed one starts to have more debt, but their financial situation can be considered healthier”, he said.

On the other hand, the data on the commitment of income, also on the rise, is more relevant to reveal the situation of families, according to Baldini. He pondered that despite the record, the level is still relatively close to levels observed in March 2020, when it was at 25.3%.

The methodology of indicators was changed by BC this month. The new calculation includes new sources in the calculation of income, including extraordinary income, such as amounts referring to emergency aid, 13th salary and vacations.

According to Baldini, the new formula makes the percentages lower than those observed in the previous methodology. But the time series was updated from the beginning and the observed trajectory did not change significantly.