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Credit to individuals and companies in Brazil to grow by up to 5.7% in 2019


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Credit to individuals and companies in Brazil to grow by up to 5.7% in 2019

Credit to individuals and companies in Brazil will grow by between 1.8% and 5.7% in real terms over the next 12 months, representing the fastest growth rate in five years, Valor Econômico reported, citing Banco Central do Brasil.

Economists surveyed by the central bank believe Brazilian companies will up their production and disentangle their investments amid a clearer economic picture in the country in the aftermath of the 2018 elections. At the same time, families will continue on the recovery path they started in 2017 following Brazil's deep recession.

With falling default rates, banks are also likely more willing to take risks. And "as political risk and economic uncertainty decreases, banks reduce spreads and the credit becomes cheaper," 4E Consulting economist Bruno Lavieri told the publication.

The news comes as new Economy Minister Paulo Guedes and his team are looking to restructure Brazil's state-run banks and sell off parts of their operations, while also urging the entities to refocus on their core operations and expanding credit.