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💸 Brazil's corporate debt problem
The prospect of even higher borrowing costs could not have come at a worse time for Brazilian companies — many of whom are already buried in debt.
Gustavo Ribeiro
January 08, 2025 • Reading Time: 2 minutes
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Credit becoming more expensive amid mounting bankruptcy protection filings
Businesses never welcome higher borrowing costs. For Brazilian companies, however, the timing couldn’t be worse. Photo: Andrii Yalanskyi/Shutterstock
Financial markets expect Brazil's benchmark interest rates to hit 15% at the end of 2025, up from the current 12.25%, amid deteriorating inflation expectations. And the prospect of even higher borrowing costs could not have come at a worse time for Brazilian companies, many of whom are buried in debt.
Data from Serasa Experian, a credit protection agency, shows a whopping rise in bankruptcy protection filings in Brazil — a trend we have flagged for years, but which exploded in 2024 (to almost 2,200 in the 12 months through October) and shows no signs of abating.
