Daniel Mello      Reporter Agência Brasil

São Paulo – The percentage of people in São Paulo who have fallen behind in making installment payments rose to 21.8% in April, up from 18.5% in March. The São Paulo Commercial Federation (“Fecomercio-SP”) has released monthly reports on payment defaults since February 2004, and

Della Rosa, an economist at Fecomercio-SP, says that although the April numbers are high, they are not necessarily a reason for concern. She says more data is needed to constitute a clear tendency.

As for the April numbers, Rosa says a number of factors contributed: higher unemployment (the government statistical bureau (“IBGE”) found that the jobless rate rose from 5.7% in February to 6.2% in March. She also mentioned holiday season spending (that is, overspending) as another probable reason for payment defaults.

Fecomericio-SP data shows that over 76% of São Paulo consumers use credit cards for purchases, around 20% use loans (“crédito pessoal”) and 15% use payment coupon books.

Fecomercio points out that one of the areas where payment delinquency has risen is in automobiles where the payment default rate is running at around 5.5%, the highest since the Central Bank began tracking in 2000.

Della Rosa says that the percentage of Paulistanos with debts was just over 50%, which is not too high. “If the number of people with debts was much higher that would be cause for concern. As it is, there is still room for more consumption. So much so, that expectations for Mother’s Day sales this year remain very strong.”

Allen Bennett – translator/editor The News in English

Link - Inadimplência na capital paulista tem maior índice desde 2007, aponta Fecomercio