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MeneameCredit in Brazil looks set to rise 17.9% this year, according to the latest survey by Brazilian banking federation Febraban, lifting the projection from 16.9% in the previous survey in September, meanwhile noting little belief that the country's new IOF tax on foreign investment in bonds and stocks will slow capital flows.
The economists and analysts from 30 banks surveyed on October 29-30 also upped their perspectives on 2010 credit growth to 18.8% from their previous projection of 18.0%.
There is a gradual, but consistent recovery in credit, which has so far been borne out in the third quarter earnings reports from the banks, Febraban's chief economist Rubens Sardenberg told BNamericas.
"The [banks' economists] are expecting that the recovery will gain momentum in the fourth quarter," the Sardenberg said.
The survey pointed to retail credit driving the expansion, but also showed rising concern with asset quality, as the average prediction on 90-day non-performing loan (NPL) ratios grew to 5.7% from 5.3% by end-2009 and 5.0% from 4.8% for end-2010.
Of the participants, 82.1% said that they see the IOF tax, aimed at slowing the appreciation of the Brazilian real against the US dollar, as having little effect against the strong fundamentals of the Brazilian economy and the growing international liquidity position.
The economists and analysts also increased their outlook for GDP growth in 2010 to 4.6% from 3.98% in the last survey.
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