Brazil’s central bank is examining potential macroprudential measures to address a sharp rise in household debt excluding mortgages, central bank chief Gabriel Galipolo said on Monday.
Outstanding non-mortgage household liabilities reached 31.1% of income in the 12 months through May, according to the latest available data. The figure underscores growing concerns over credit expansion amid rising delinquency rates, despite improving household incomes and historically low unemployment.
Speaking at an event hosted by banking lobby group Febraban, Galipolo emphasized that the central bank is pursuing a gradual transition to prevent the debt burden from becoming entrenched. "We do not want this growing problem to perpetuate itself," he said. The approach reflects a balance between expanding financial inclusion and ensuring responsible borrowing practices.
Policymakers are evaluating tools to enhance borrower discipline, including measures to improve transparency around credit costs and strengthen risk provisioning by lenders. The central bank’s review also incorporates international experiences in managing household indebtedness, signaling a cautious but proactive stance on financial stability.
The discussions come as Brazil’s labor market remains resilient, with unemployment near multi-year lows, but non-mortgage debt levels continue to climb. The central bank’s focus on macroprudential tools suggests a targeted response to mitigate risks without stifling credit growth entirely.
