Credit should grow 7.7% this year, predicts Central Bank

The Central Bank (BC) predicts that the volume of bank credit will grow by 7.7% in 2023. The projection had a slight increase compared to the previous forecast of 7.6%, released in March of this year, and continues to indicate a credit slowdown process, “compatible with the cycle of monetary tightening” of an increase in the Selic rate, the economy’s basic interest.

The BC’s Monetary Policy Committee (Copom) maintains the Selic rate at 13.75% per year since August last year, the highest level since January 2017, despite the drop in inflation and pressure from the government to reduce basic interest rates.

The Selic is the BC’s main instrument to reach the inflation target because the rate affects prices, since higher interest rates make credit more expensive and stimulate savings, avoiding heated demand. The effects of monetary tightening are felt in the credit enhancement and the economic slowdown.

The new estimate incorporates new data from the credit market and the revision of the future macroeconomic scenario. The information is from the Inflation Report, quarterly publication do BC, released this Thursday (29).

“The data from the credit market released since the previous report show a higher-than-expected evolution in the balance of loans to households, mainly in the earmarked segment, while financing to companies declined more intensely, with emphasis on the free segment”, informed the agency.

segment forecast

For 2023, the growth projection of the free credit stock for individuals increased from 8% to 9%, “reflecting the greater resilience observed in concessions until April 2023”. In turn, the projection for growth of free credit to companies was reduced from 6% to 3%, “due to the more intense deceleration than expected in the first four months of the year”.

“This movement stems, in part, from the relatively restrictive supply of credit at the beginning of the year, a consequence of both the general conditions of the economy, including the current stage of the monetary cycle, and the repercussions of the Americanas case”, explained the BC.

In judicial recovery since January, Lojas Americanas faces a crisis since the revelation of “accounting inconsistencies” of R$ 20 billion. Later, the group itself admitted that debts with credit institutions could reach R$ 43 billion.

Free credit is one in which banks have the autonomy to lend money raised in the market and define the interest rates charged to customers. Directed credit, on the other hand, has rules defined by the government and is intended, basically, for the housing, rural, infrastructure and microcredit sectors.

The deceleration of non-earmarked credit was partially offset by an increase in earmarked credit. In this segment, the projected growth in the balance of individuals increased from 9% to 11%, given the greater availability of rural credit at the beginning of the year.

The review, on the other hand, also reflects the still discreet slowdown in the balance of real estate credit, despite the retraction in concessions observed since mid-2021.

Finally, in the corporate segment, earmarked credit, the projection was maintained at 7%.