The Brazilian government is increasingly concerned by a boom in credit deals, which now amount to more than a third of the country's gross domestic product (GDP).
Personal, corporate and institutional credit now tops 957.6 billion reais (550 billion U.S. dollars), which equals 34.9 percent of Brazil's GDP, the Central Bank announced on Tuesday.
According to the bank, private borrowers are responsible for a total of 189.5 billion dollars, mostly fueled by an increase in car-leasing agreements.
The head of the Central Bank's economic department, Altamir Lopes, said on Tuesday that total credit is expected to rise by 20 percent to 25 percent in 2008 compared to last year, roughly 40 percent of Brazil's GDP. He said the rise was "reasonable" compared to similar economies.
However, Finance Minister Guido Mantega on Monday expressed concern over the issue and said he will meet with bank chiefs this week to discuss measures to slow consumption and avoid inflation.
The Central Bank's monetary policy board has indicated it is thinking of raising its key interest rate, currently at 11.25 percent, to head off inflation. The bank is aiming at a 4.5-percent inflation target this year.
Source: Xinhua
|
Comment
Tell A Friend
Print Format
Save Article