Income committed to debt is the lowest since before the pandemic

The Consumer Indebtedness and Default Survey (Peic), calculated monthly by the National Confederation of Commerce in Goods, Services and Tourism (CNC), pointed to stability in household indebtedness in the first quarter. The month of March ended with 78.3% of families indebted, the same rate as in February. The survey was released on Tuesday (4).

One of the highlights of the survey is the percentage of income committed to debt, which settled at 29.9% of household income and is the lowest level since February 2020. The level of default also fell for the fourth consecutive time and reached 29. 4% of households, down 0.4 percentage points (pp) in March.

Over-indebtedness

Of the total number of families who reported having outstanding debts (post-dated checks, credit cards, overdrafts, store installments, payroll loans, personal loans, car and home payments), 17.1% considered themselves highly indebted. , an indicator that also remained unchanged in the monthly passage, after two consecutive increases.

“Consumer indebtedness has been moderating since October, grew between January and February, with tight budgets due to typical expenses at the beginning of the year, and ended the quarter in stability”, explained, in a note, Izis Ferreira, CNC economist responsible for Peic .

According to the economist, the improvement in disposable income with the positive evolution of the labor market and the deceleration of inflation attenuated the default indicators, which ended the quarter at 29.7% of families. “Despite this, those who have overdue debts for a longer period continue to have difficulties in getting out of default because of high interest rates”, said Izis.

Peic showed that the proportion of consumers unable to pay overdue debts from previous months reached 11.5% of the total in March, with a slight decrease of 0.1 pp compared to February, but presented the highest level since November 2020 , in the comparison between the quarterly averages.

The reduction in contracting debts in March occurred among consumers in the first two income brackets, with up to three minimum wages and between three and five minimum wages. In the highest income ranges, between five and ten minimum wages and above ten minimum wages, the proportion of indebted people grew. According to Izis Ferreira, this is a reflection of higher consumption of services by the richest.

The indicator of overdue debts also decreased at the margin for the two groups considered the poorest, while it increased among those with incomes between five and ten minimum wages. “Bolsa Família, with higher amounts and the formal hiring of people with a lower level of education, have helped lower-income families to pay off debts”, said the economist.

Despite this, in the annual comparison, Peic showed that the volume of families with overdue debts increased in all income brackets.

The percentage of consumers with overdue debts from previous months also ended the quarter in decline among the poorest, but increased by 1.1 pp in the year. The index grew in the annual comparison only in the first two income ranges, of up to five minimum wages.

The commitment of the income of all Brazilians with debts dropped to 29.9% of income. For every BRL 1,000, the consumer spent, on average, BRL 299 paying debts in March. This value is the lowest since February 2020, before the covid-19 pandemic.

“Among lower-income families, the reduction in the proportion of those indebted was also accompanied by a decrease in the commitment of these families’ income to debt. Consumers earning up to three minimum wages ended the quarter dedicating 30.9% of their income to paying off debts, the lowest percentage since June 2021. For every BRL 1,000, they spent BRL 309 to pay debts with financial institutions” , says CNC.

The average income share of the richest committed to debt increased, it was 0.4 pp among those who earn from five to ten minimum wages, resulting in 29.4% of income, and 0.3 pp among those with more than ten minimum wages. minimum wages, with 27% committed.

defaulters

Even with renegotiations, for every 100 consumers with overdue debts, 45 arrived in March with delays for more than 90 days. “That is, those who have overdue debts, accumulated from previous months, end up with greater difficulty in paying them, because, with higher interest rates, the debt value increases more over time”, explained Izis Ferreira.

The economist points out that the high proportion of consumers with overdue debts for more than three months keeps the alert on the need for renegotiations and monitoring the success of debts renegotiated by financial institutions. According to Izis, credit concessions to consumers are slowing down, but remain high, and there is a deterioration in the quality of resources being contracted.

According to the CNC, credit concessions, at the moment, are concentrated and advancing in short or very short term revolving credit (such as overdraft and credit card), which are the ones with the highest interest rates on the market.

On March 23, Izis Ferreira presented the studies to the Executive Secretary of the Ministry of Finance, Gabriel Galípolo, to assist in the development of the Desenrola program, which aims to reduce indebtedness and default of families earning up to two minimum wages.

According to the president of the CNC, José Roberto Tadros, “Peic is, today, one of the main indicators of the economic health of Brazil, as it identifies the main bottlenecks for improving the financial conditions of the Brazilian population”.

For him, CNC’s participation in the construction of Desenrola is a result of the importance of the research, started in 2010 by the confederation, and demonstrates the entity’s concern for the country’s sustainable development.