Banco Centraldo Brasil lowered its loan growth forecast for 2016 to 5% from 7%, Valor Econômico reported March 30.

The revision was reportedly triggered by rising interestrates and reduced lending appetite from banks.

If the new outlook comes to pass, it will be the worst yearfor credit growth since 2007, according to the report.

The central bank also expects rising corporate defaults givencontinued credit market deterioration, the publication noted. Data releasedfrom the central bank on March 29 showed that the ratio of overdue loans over90 days for general credit lines that do not fall under allocation requirementswas 5.5% in February, the highest level since 2011.