Credit reaches 36% of the GDP, the greatest level since 1995
O Estado de S.Paulo 12/27/2007
Pushed by the heating of the economy, lower interest rates and the race of consumers to make their Christmas shopping, the volume of credit in the economy may get close to R$ 1 trillion (US$ 562 billion), nearly 36% of the Gross Domestic Product (GDP) in the end of this year, the highest level since the peak of the Real Plan, in 1995. According to data released yesterday by the Brazilian Central Bank (BC), in November credit had already reached R$ 909 billion (US$ 511 billion) and, in only 11 days of December, it grew another 3%. In 2007, the credit boom is being pushed mainly by individuals, that is, the common consumer, who obtained 31.3% more resources from the financial system than in 2006. The credit type of greatest growth is that of real estate financing (70.3% this year), followed by the payroll loan (32.8%), in which the worker borrows the money from the bank and has the installment automatically deducted from his salary at the end of the month. Another sector that is in expansion is the one of credit for the acquisition of cars, which reached R$ 79.5 billion (US$ 44.7 billion) in November, an increase of 25.3% since the last year. With Christmas around the corner, the credit card purchases have also gone up, reaching R$ 17.6 billion (US$ 9.9 billion) in November, 3.5% above October and 31.2% above the same month of 2006. The good news of the end of the year, according to the BC, is that, in general, the money is reaching the pocket of the consumers at a lower and lower cost. The interest rate charged from individuals fell from 52.1% a year in the end of 2006 to 44.8% in November, the lowest rate since the beginning of the Real Plan. Besides credit for consumption, credit for production is growing in almost all sectors. In the industry, for instance, the transactions already reach R$ 205.2 billion (US$ 115.3 billion), 24.7% more than in 2006. In civil construction, the increase reaches 24.4%, and 21.7% in commerce.