Credit in Brazil is expected to grow 7.6% this year, compared to a forecast of 6.7% in December 2021, based on a market survey by the country's banking federation Febraban.

Positive developments in the credit market and better indicators from the Brazilian central bank contributed to the improved forecast, the federation said, including the increase in total credit, which grew 16.5% in 2021.

"Bank credit in 2022 will be an important containment to avoid the worsening of the economic situation, although with a greater accommodation of the growth rhythm of the portfolios, reflecting the expectation of a more difficult year, with low economic growth, continuity of inflationary pressures and Selic at a high level until the end of the year," Febraban President Isaac Sidney said.

The central bank raised the Selic rate by 150 basis points to 10.75% in February.

Defaults were also projected at 3.7%, slightly below the 3.8% in the last survey in December.

For 2023, credit growth was also forecast at 6.6% for 2023.