Even with the weight of the Central Bank’s highly restrictive monetary policy on economic activity, the credit market is expected to see a gradual slowdown and still record growth of around 8% throughout 2026. The figures are contained in the December edition of the Febraban Economy and Banking Expectations Survey, which surveyed 19 banks operating in Brazil.
The percentage of institutions that think there will be a gradual slowdown in credit this year fell from 81.8% to 73.7% between the November and December surveys, while 15.8% of participants expect credit to maintain the pace of expansion seen last year in 2026. Those predicting a sharper slowdown make up just 10.5% of responses, down from 18.2% in November.
The projected pace of expansion for 2025 also increased, from 8.9% to 9.2%, a result that reflects the expectation of more targeted credit – which more than offset a slight decline in free credit projections. The estimate for bank growth in 2026 also increased, from 7.9% to 8.2%. The expected default rate for 2025 remained at 5.1%, while that for 2026 showed a slight increase from 5.1% to 5.2%.
Febraban’s research also supports the recent market perception that the Selic rate cut cycle is only expected to begin at the March meeting of the Central Bank’s Monetary Policy Committee (Copom). Now, 70% of respondents expect monetary easing to begin at the end of the first quarter, compared to 54.5% in the previous survey, while expectations for a first cut at the January Copom meeting rose from 45.5% to 30%.
When it comes to fiscal policy, all banks believe the government will meet the main outcome target for 2026, but 80% of respondents believe further measures will be needed – split between 45% who believe the government will focus on spending-related measures and 35% who foresee a return to the revenue-raising agenda.
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