October Records Brazil’s Highest Monthly Increase in Credit Default This Year
RIO DE JANEIRO, BRAZIL – Trade consumers’ default grew two percent over the same month last year, according to data from the Central Credit Protection Service of CDLRio (Club of Store Directors of Rio de Janeiro).
The proportion of customers who were unable to pay off their purchases made on credit in Rio de Janeiro increased by two percent in October 2019, compared to 2018.
Since the beginning of this year, all months have seen an increase in this index. October surpassed July by 0.1 percentage point, which until then had the worst increase, with default growing 1.9 percent compared to the same month the previous year.
According to the CDL-Rio, the default in Rio has accumulated a 1.2 percent growth up to October, compared to the same ten-month period in 2018.
The persistence of the economic crisis in the state is the reason pointed out by CDL-Rio for the largest increase in default, with unemployment as its worst consequence.
“While unemployment has been retreating in the country, here in Rio it continues to worsen. As a result, people find it harder to buy and also to pay off their debts,” says Aldo Gonçalves, president of CDL-Rio.
“There’s nothing new, it’s the situation that keeps accumulating and getting worse,” he added, when asked if there would be any extra factor related to this month of October.
Consultations and payment
In other indices recorded by the CDL-Rio, the consultations (an item that shows the movement of trade) fell 3.6 percent in October also in relation to the same month in 2018. In the first ten months of the year, there was a 7.4 percent drop, emphasizing the lower purchasing power.
The only positive variation was that of buyers who managed to pay off their debts. It rose 1.5 percent last month, compared to October 2018. In the accumulated of 2019, the settled debts continue to decline by two percent over the first ten months of the previous year.
Unemployment
Other researches’ figures reflect the observation of the president of CDL-Rio, Aldo Gonçalves in relation to unemployment.
According to the latest edition of the Continuous PNAD (National Survey by Household Sample), published in August by IBGE (Brazilian Institute of Geography and Statistics), Rio de Janeiro recorded the fifth-worst state unemployment rate in Brazil.
Unemployment reached 15.1 percent, only worse in Sergipe (15.3 percent), Pernambuco (16 percent), Amapá (16.9 percent) and Bahia (17.3 percent).
In relation to job vacancies, the panorama is even more severe, placing the Rio de Janeiro capital in the spotlight. A survey conducted by the consultancy firm Tendências based on data from the CAGED (General Registry of Employees and Unemployed), of the Ministry of Labor, shows that the city of Rio de Janeiro lost 8,072 formal job vacancies in the first eight months of 2019.
This drop represents the negative balance between employees who were hired and those who were laid off, between January and August this year. It is almost double the second-worst mark among the 11 state capitals that suffered a decline, recorded in Fortaleza, which lost 4,139 vacancies in the same period.
For comparison purposes, most capitals improved in the first eight months of 2019, with São Paulo leading, recording 58,889 more admissions than layoffs, according to Tendências. Throughout the country, the positive balance was 103,294 more job vacancies.
Source: Diário do Rio
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