Brazil's outstanding bank credit rose 10.2% in 2025, official data released on Tuesday indicate, outpacing the central bank's forecast and reflecting a notable pickup in consumer borrowing following government credit-support policies.
The administration of President Luiz Inacio Lula da Silva introduced a package of measures in 2025 designed to enlarge access to payroll-deductible loans for private sector employees and to widen subsidized mortgage programs to include middle-income households. Those steps coincided with household lending accelerating by 11.6% during the year, above the central bank's December estimate of 10.4%.
Corporate credit also grew, expanding by 8.1% in 2025, roughly matching the central bank's 8.0% projection. Overall, total credit outstanding in Brazil increased by 1.8% in December alone from the previous month, bringing the stock of loans to 7.1 trillion reais ($1.37 trillion) at year-end.
The central bank has maintained an exceptionally tight monetary policy stance to guide inflation toward its 3% target, leaving the benchmark interest rate at 15% - the highest level in nearly two decades - since July of the prior year. Despite those high borrowing costs, policymakers had estimated in December that total loans would finish the year with a more modest 9.4% expansion, down from 11.5% in 2024.
Credit quality indicators showed small moves in December. A broad default measure for consumer and business loans that excludes earmarked credit rose slightly to 5.4% from 5.3% the month before. At the same time, lending spreads tightened a little, narrowing to 33.6 percentage points from 33.8 points in November.
These figures reflect a mix of policy-driven demand for household credit and cautious corporate borrowing in an environment of sustained high interest rates. The exchange rate used in the data release was $1 = 5.1998 reais.
Context and market implications
The faster-than-expected expansion in bank lending suggests that government credit initiatives played a meaningful role in supporting consumer borrowing, while corporate lending remained broadly in line with expectations. The central bank's continued emphasis on tight policy settings to achieve its inflation target remains a key influence on cost of credit and credit market dynamics.