By Jaylan Boyle, Senior Contributing Reporter RIO DE JANEIRO – Consumer spending in Brazil shows no signs of slowing down during the holiday season. While retailers around the world are suffering with sluggish sales, Brazilian buyers are flocking to purchase high-ticket items such as electronics and cars. Brazil credit card dept rises 28.9 percent last year, photo by Pixomar. In part, this clamor to get to the checkout is being driven by easier access to credit for Brazilians who previously could not afford interest rates, or get past prohibitive lending criteria. Figures compiled by the Lafferty Group show that consumers in the U.S. lowered their credit card balances across the board by 8.7 percent last year, meanwhile those in Brazil signed up for an extra 28.9 percent credit card debt. This compares with a rise of 9.2 percent in Latin America as a whole, and even eclipses the numbers from China, where consumers added 17.1 percent to their debt. Though some analysts have warned that this kind of profligacy could set the stage for the same kind of credit bubble conditions in Brazil that recently brought recession to many countries around the world, it seems that there is a long way to go before getting to the “red zone.” In the U.S., credit card debt still amounted to six percent of the country’s economic output, compared with less than one percent in Brazil. More than 20 million Brazilians have risen above the poverty line in recent times, and the country’s burgeoning middle class, which accounts for nearly half Brazil’s purchasing power, swelled by nearly 29 million. This translates to huge numbers of people buying goods like cars and electronics for the first time, an attractive prospect for international manufacturers. More than 10,000 cars are driving out of Brazilian showrooms daily, photo by SantaRosa/Flickr Creative Commons License. Car makers in particular have been racing to set up shop in Brazil, and streets could soon bear a more diverse range of brands than the predominant Fiat, VW and General Motors. Japanese manufacturers like Toyota and Honda will likely become a more common sight. In an effort to stay ahead of the pack, market leaders Fiat Brasil have announced investment plans of US$6 billion over the next four years. “Brazil is a market set to keep growing in coming years and this has attracted many investments from the auto industry giants,” said Cledorvino Bellini, president of Fiat Brasil. In fact, the growing middle class is responsible for lifting Brazil into the 4th position internationally in terms of auto sales, with consumers buying 3.45 million vehicles in 2010. Brazil now stands behind China, the U.S. and Japan, but ahead of Germany, up 9.8 percent for the same period in 2009, with more than 10,000 vehicles a day are driving out of show rooms across the nation. By far the largest in Latin America, Brazil’s consumer electronics market is estimated at US$26.6 billion in 2010. This is expected to grow 11 percent to US$36 billion by 2014, driven by growing popularity of digital lifestyle products such as LCD TV sets and smartphones. Computer hardware (including notebooks and accessories) accounted for around 40 percent of Brazilian consumer electronics spending in 2009, and forecasted at US$8.6.billion for 2010. In even more good news for retailers, PC penetration, which is still projected at just 29 percent in 2010, could climb to 38 percent by 2014. 7 Responses to "Brazilian Consumer Spending Grows" Pingback: Corisco Films Launches in Rio | The Rio Times Pingback: Natural Gas “Flex” Cars in Brazil | The Rio Times Pingback: Credit Spending Fuels Brazil Growth | The Rio Times Pingback: Over Half of Brazilian Families in Debt | The Rio Times Pingback: Rio Roadway Traffic Slows to an Average of 12 mph: Daily Update | The Rio Times | Brazil News Pingback: Brazil Overtakes UK as Sixth Largest World Economy: Daily Update | The Rio Times | Brazil News Pingback: Brazil: A Case Study for Sustainable Development – Urban Times Leave a Reply Cancel Reply Your email address will not be published.