What Can be Expected Regarding the Behavior of Credit?

BRAZIL ECONOMICS - Report 30 Jan 2017 by Affonso Pastore, Cristina Pinotti, Marcelo Gazzano and Caio Carbone

Although further contraction of GDP in the first quarter cannot be discarded, there are already clear signs that the economy is ready to start a period of recovery. The continuity of the reforms and indications that the monetary easing will be intense have improved the risk perceptions and strengthened that outlook. In situations like this, the task of economists is to look for signs of trend reversal, and the behavior of the credit market is one of the indicators that serves this purpose. The snapshot of this behavior is not yet favorable, but some improvement has occurred in lending in the real estate sector and there are clear indications that banks expect the supply of credit to become somewhat less restrictive.

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