Brazilian debt is increasing.

The number of families with debts or overdue bills increased in July compared to the previous month, but there was an improvement in the perception of their ability to pay, according to the Consumer Indebtedness and Default Survey (Peic), released by the National Confederation of Commerce (CNC). While the percentage of families who say they have overdue debts rose from 23,3% to 23,7% during the period, the proportion of those who say they are unable to pay fell from 8,4% in the previous month to 8,1%.

"There is an outlook that the job market will remain favorable. As there has also been a drop in the IPCA (Broad Consumer Price Index) in recent months and the real income of families has increased, there has been a perception that it is important to meet debt obligations in the coming months in order to continue consuming," assesses the chief economist of the National Confederation of Commerce (CNC), Carlos Thadeu de Freitas.

According to the economist, inflation and labor market data also show that default rates will increase moderately in the coming months. "There is no room for it to increase rapidly, as many thought," he says.

According to the research, in July the total number of indebted individuals fell to 63,5%, compared to 64,1% in June. However, this percentage is still higher than the 57,7% recorded in July of last year. The decrease compared to the previous month reflects credit restrictions in the country, explains economist Marianne Lorena Hanson of the CNC (National Confederation of Commerce).

"We have been observing a slowdown in credit granting since the beginning of the year, so it is natural that the percentage of indebted families will slowly decrease. It won't be linear, because the credit balance is still very high," he says.