São Paulo reaches a record of 2.6 million families in debt, says FecomercioSP
RIO DE JANEIRO, BRAZIL – The increase in inflation, mainly driven by the rise in food, electricity, gas, and fuel prices, has led families in the city of São Paulo to get increasingly indebted.
In July, the percentage with some debt reached 66.1%, compared to 64.6% in June, reaching a new historical record of 2.63 million indebted families, according to data from the Consumer Debt and Delinquency Survey (Peic) of the Federation of Commerce of Goods, Services, and Tourism of the State of São Paulo (FecomercioSP).
According to the survey, in just one month, more than 60 thousand households entered the statistics.
With the reduced purchasing power due to inflation, families have sought the credit card – especially the installment plan – as an escape valve to maintain consumption, making the credit card also the record holder in the month, with 80.9% among the indebted.
Data points to a slight drop in defaults despite the scenario, from 19.5% in June to 19.1% in July. Even with the monthly drop, the level is still historically high.
The analysis by income bracket shows that the advance of indebtedness, both monthly and annually, has affected both families earning up to ten minimum wages and those earning more.
However, the percentages of indebtedness and default are higher among the first group since families with lower income are also less likely to consume.
While the better-off families raised their consumption intention by 1.5%, reaching 88.3 points, the index for those with lower purchasing power fell 1.2%, returning to 60.4 points.
Dissatisfaction with economic conditions is mainly linked to job insecurity.
In the study, the Current Employment item dropped 3.4%, the sixth in a row, reaching 76.7 points.
The Consumer Confidence Index (ICC), on the other hand, confirms that inflation is the biggest obstacle for families, either to maintain consumption or to increase confidence: the index grew 3.4% in July, reaching 111 points. However, the result was driven by improved expectations, not by current conditions.
More: Brazil news in English, every day from The Rio Times.
This article was produced by The Rio Times’ automated AI newsroom. Editorial responsibility: Matthias Camenzind, Publisher and Editor-in-Chief. The Rio Times also runs Ask Rio Times, which answers from 100,000+ of our own articles, the daily Latin America Power Map, and prediction-market odds on elections and markets.. How we use AI · Report an error
Living in or visiting São Paulo? See this month's events and our São Paulo city guide with rents, safety and upcoming concerts.