Category: 3. Business

Clinical Topics:
Heart Failure and Cardiomyopathies, Acute Heart Failure

Keywords:
CardiaCast, Heart Failure, Hyperkalemia, Hypokalemia

Explaining Strong Credit Growth in Brazil Despite High Policy Rates

By Swarnali A. Hannan, Daniel Leigh, and Rui Xu

October 9, 2025

Higher income and fintech expansion boosted credit growth, even as monetary policy remained effective

At 15 percent, Brazil’s monetary policy interest rate (called Selic) is one of the highest among major economies. Yet in 2024, bank credit grew by 11.5 percent and corporate bond issuance rose by 30 percent.

This credit expansion—in the face of high policy rates—benefited many individuals, households, and companies. But it also raised questions about the effectiveness of monetary policy itself. In other words, why did the central bank’s efforts to cool down the economy, by making financing more expensive, seem not to be working?

Our analysis, in the context of Brazil’s latest yearly economic review (the Article IV consultation), shows that concerns have been largely unwarranted and that monetary policy transmission in Brazil remains effective. Indeed, recent data indicates that credit growth is starting to slow down.

So, what exactly has been happening? Even as monetary policy was doing its job as intended, we saw two other factors playing a critical role: strong income growth and the country’s success in expanding financial inclusion. These factors boosted the demand for credit and its supply. 

A committed central bank

Brazil’s was the first major central bank to hike rates during the pandemic. After a period of easing, it started a new tightening cycle in September 2024. These decisions have been appropriate and guided by the need to bring inflation and inflation expectations down to its 3 percent target.

The country’s twelve-month inflation rate reached 5.1 percent in August, down slightly from the previous month, but still well above target this year. Inflation expectations are also projected to stay above target over an eighteen-month horizon. This explains the rise in policy rates since the pandemic, in line with standard inflation-targeting principles.

How effective is monetary policy transmission?

To gauge the effectiveness of Brazil’s monetary policy tightening, our report estimates how changes in the central bank’s policy interest rate pass through to bank lending rates paid by households and businesses.

We find that a 1 percentage point increase in the policy rate raises lending rates by around 0.7 percentage point after four months. To raise average lending rates in the economy by one percentage point, the monetary policy rate must increase by about 1.4 percentage points, since roughly 40 percent of total credit is comprised of government-directed loans that are less responsive to policy rate changes.

The analysis also suggests that since 2020, corporate lending rates have become more responsive to changes in the basic rate. This may in part result from the 2018 reform of Brazil’s large development bank, BNDES, which aligned its lending rates with long-term market rates. Bank-level analysis shows corporate loans adjust faster than consumer loans, likely due to tighter margins and more experienced borrowers. In turn, payroll-backed consumer loans are the least responsive because of rate caps.

What drove credit growth

Although Brazil’s monetary policy is working, credit growth has been strong over the past few years. This was due to both cyclical factors and structural changes. On the cyclical side, Brazil’s economy has grown faster than expected, with low unemployment and rising incomes driving higher credit demand.

Moreover, Brazil has been making significant structural changes that have increased financial inclusion and credit availability.

The rapid expansion of fintech lenders gave more people access to credit. In 2024, digital banks and other fintech lenders accounted for a quarter of the credit card market and over 10 percent of non-payroll personal loans. Increased competition reduced banking-sector concentration and lowered average lending rates of incumbent banks. In addition, bond-market financing for corporates as a share of GDP tripled in the last decade, driven by tax-exempt debentures. All these factors supported credit growth.

With a 15 percent basic rate, Brazil’s central bank has administered a strong dose of monetary tightening to temper credit growth and return inflation and expectations to target. New loan volumes have been falling since April, further suggesting that the treatment is working. More broadly, Brazil’s economy is showing signs of moderation amid tight monetary and fiscal policies and elevated global policy uncertainty. Overall, our research shows that concerns about the lack of effectiveness of monetary are proving to be largely unwarranted and that monetary policy transmission in Brazil remains active.

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Daniel Leigh is IMF mission chief for Brazil, Swarnali A. Hannan is a deputy division chief in the IMF’s Western Hemisphere Department, and Rui Xu is an economist in the Monetary and Capital Markets Department

Forward-Looking Statements

This press release contains certain forward-looking statements, beliefs or opinions, including with respect to CDB Aviation’s business, financial condition, results of operations or plans. CDB Aviation cautions readers that no forward-looking statement is a guarantee of future performance and that actual results or other financial condition or performance measures could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as ”may,” “will,” “seek,” “continue,” “aim,” “anticipate,” “target,” “projected,” “expect,” “estimate,” “intend,” “plan,” “goal,” “believe,” “achieve” or other terminology or words of similar meaning. These statements are based on the current beliefs and expectations of CDB Aviation’s management and are subject to significant risks and uncertainties. Actual results and outcomes may differ materially from those expressed in the forward-looking statements. Accordingly, you should not rely upon forward-looking statements as a prediction of actual results and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. Except as required by applicable law, we do not undertake any obligation to, and will not, update any forward-looking statements, whether as a result of new information, future events or otherwise.

About Azerbaijan Airlines (“AZAL”)

AZAL holds the prestigious 4-Star Skytrax rating and has repeatedly been named Best Regional Airline in Central Asia and the CIS at the Skytrax World Airline Awards. As an IATA member, the airline continues to expand its network, drive digital innovation, and enhance passenger comfort. With a modern fleet that meets ICAO standards and an expanding route network, AZAL provides top-level service while strengthening Azerbaijan’s position in the global aviation market. Sustainable development is a cornerstone of AZAL’s strategy.

The airline is a signatory of the UN Global Compact, publishes its ESG commitments, and participates in IATA’s CO₂ Connect and IEnvA programs, reinforcing its position as a reliable and responsible partner in the international aviation industry. www.azal.az/en

About CDB Aviation

CDB Aviation is a wholly owned Irish subsidiary of China Development Bank Financial Leasing Co., Ltd. (“CDB Leasing”) a 40-year-old Chinese leasing company that is backed mainly by the China Development Bank. CDB Aviation is rated Investment Grade by Moody’s (A2), S&P Global (A), and Fitch (A+). China Development Bank is under the direct jurisdiction of the State Council of China and is one of the world’s largest development finance institutions. It is also the largest Chinese bank for foreign investment and financing cooperation, long-term lending and bond issuance, enjoying Chinese sovereign credit rating.

CDB Leasing is the only leasing arm of the China Development Bank and a leading company in China’s leasing industry that has been engaged in aircraft, infrastructure, ship, commercial vehicle and construction machinery leasing and enjoys a Chinese sovereign credit rating. It took an important step in July 2016 to globalize and marketize its business – listing on the Hong Kong Stock Exchange (HKEX STOCK CODE: 1606). www.CDBAviation.aero

Pakistan’s startup ecosystem continued to attract investor interest during the third quarter of 2025, securing $15.2 million across six disclosed deals

The amount is a steep drop from $58 million in Q2, according to a new report by Invest2Innovate (i2i). The quarter’s biggest raise came from Trukkr, which bagged $10 million in a mixed equity and debt round.

It was followed by BusCaro’s $2 million hybrid deal, Myco’s $1.5 million Web3 raise, Metric’s $1.3 million fintech seed round, and ScholarBee’s $350,000 convertible note. Smaller but notable funding came from Pakhtun Wardrobe, which raised $31,000 in equity.

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Additionally, three startups from the i2i Scale accelerator secured undisclosed funding rounds, bringing the total to nine deals, making it the busiest quarter since late 2024.

Unlike past quarters dominated by single mega deals, Q3 reflected greater diversity in both sectors and deal sizes. Activity spanned logistics, mobility, fintech, Web3, edtech, fashion, and digital health, signaling a maturing ecosystem. Logistics led with Trukkr’s raise, followed by mobility and fintech.

A key trend this quarter was the rise of hybrid financing models. Out of six disclosed deals, four — Trukkr, BusCaro, Myco, and ScholarBee — combined equity, debt, or convertible notes. Only Metric and Pakhtun Wardrobe closed traditional equity rounds.

This marks a significant shift from earlier quarters, where pure equity deals dominated. Founders are now opting for more flexible funding structures that minimize dilution, while investors are testing models that balance protection and long-term upside — an indicator of a maturing investment landscape.

Q3 also sustained the positive momentum for women-led or co-founded startups. Following MedIQ’s $6 million raise in Q2, the trend highlights growing gender diversity, even if deal sizes remain smaller than male-led ventures.

Investor participation was balanced in volume but uneven in value. Local investors — including Accelerate Prosperity, Salt Ventures, i2i Ventures, and several angel investors — backed early-stage rounds like BusCaro, ScholarBee, and Pakhtun Wardrobe.

In contrast, international investors such as Yango Ventures (UAE), Daman Investments (UAE), Cartography Capital (US), 500 Global (US), A-Typical Ventures (Qatar), Plus VC (Abu Dhabi), and Tim Draper (US) dominated larger deals, accounting for most of the disclosed capital.

While global confidence in Pakistani founders remains strong, analysts say building deeper local growth capital is essential for long-term sustainability.

The report concludes that six startups made up nearly all disclosed funding this quarter, showcasing the country’s ability to produce investable ventures across multiple sectors.

However, it also points to a persistent gap — the ecosystem needs more mid-sized rounds to bridge the space between small seed tickets and large Series A investments.

Tesla is being investigated by the US government after reports the firm’s self-driving cars had broken traffic laws, including driving on the wrong side of the road and not stopping for red lights.

It said it was aware of 58 reports where the electric cars had committed such violations, according to a filing from the National Highway Traffic Safety Administration (NHTSA).

An estimated 2.9 million cars equipped with full self-driving tech will fall under the investigation.

Tesla, whose boss Elon Musk recently became the world’s first half-trillionaire, has been approached for comment.

The NHTSA’s preliminary evaluation will “assess the scope, frequency, and potential safety consequences” of the “Full Self-Driving (Supervised)” mode.

In this mode – which costs extra for Tesla owners – the cars can make lane changes and turns, but drivers must always be alert to take over at any time.

According to the NHTSA report, there were six crashes caused by cars stopping at a traffic light before setting off while the light was still red.

Four of the crashes resulted in injuries.

The traffic authority said Tesla had taken action “to address the issue” of cars going through red lights at a particular intersection in Maryland, where the problem repeatedly occurred.

The agency will also investigate reports of vehicles going into the opposite lane when making a turn.

It said some of the reported incidents gave “little notice to a driver or opportunity to intervene”.

Tesla is already facing an investigation from the NHTSA over the cars’ door locking mechanisms, after cases where children were reportedly trapped inside Model Y cars.

In some instances, car owners chose to smash the windows to let them out.

Tesla recently unveiled cheaper models of two of its most popular cars, as it tries to compete with cheaper electric vehicles often made by Chinese companies.

Its boss Elon Musk was formerly a close ally of President Donald Trump before a public falling-out earlier in the year.

In July, he announced the formation of a new political party, the America Party, in an attempt to rival the Republicans and Democrats.

The following sentence might make a globalist cry out for joy: A toy that is manufactured by a Chinese company in Vietnamese factories, designed by a Dutch artist in Belgium, inspired by indie toy culture in Hong Kong, and made viral thanks to a Thai K-pop star, has turned into the biggest Gen-Z cultural trend of 2025.

That abomination of a sentence is the story of Labubu, the creepy-cute stuffed monster that swept the world this summer. You must have seen the trend by now, but most people are still unaware of the global, decade-long story that led up to it. Last week, I published a feature story about my journey into the heart of Labubu, how this cultural mania moment was created, and where it may go from here.

It’s an inherently international story, but it’s not the first time we’ve seen it. Think about how the world fell for Pokemon Go or Kpop bands like BTS and Blackpink. These are all examples of regional cultural powerhouse industries successfully finding global audiences for their work. What’s new about Labubu, however, is that it’s the first time a Chinese company was able to engineer this level of success and cultural impact.

Sure, there are always coincidences at work for a success of this scale, but the more I reported on this story, the more I also realized the historical and economic reasons why Labubu, and the toy company behind it, Pop Mart, ended up in this place. In many ways, it resembles other Chinese tech companies that went from counterfeit producers to international name brands, moving up the value chain as they transformed manufacturing experience into valuable technological knowhow.

The story of Labubu begins in Hong Kong in the 1970s and early ‘80s, when the city became a manufacturing hub for toys. From Mattel and Disney to Japan’s Bandai, almost every major toy company was outsourcing production to factories in Hong Kong, due to the low labor costs there.

Howard Lee, the founder of a Hong Kong toy studio called How2Work, told me how that period of history shaped his childhood. “Many parents would go to factories and come home with outsourced gig work like hand painting toys at home,” he says. It was also easy for people to buy toys with cosmetic or functional imperfections from the factories directly, so a generation of children like Lee grew up with relatively easy access to flawed dolls and other toys, which made them yearn more for the better ones they couldn’t afford.

Almost 75,000 farmed salmon have escaped into open water in Loch Linnhe in the Highlands after a fish farm was damaged by Storm Amy.

Operator Mowi said a net on a pen at its Gorsten farm was torn during the severe weather.

The fish farm company said it was investigating the incident.

Scottish Greens MSP Ariane Burgess and charity WildFish Scotland said the escaped fish could pose a risk to wild salmon.

High winds during last weekend’s storm caused power cuts and also damaged sub-sea cables that bring internet services to Shetland and Tiree.

Mowi said it regretted the escape of fish into Loch Linnhe, a sea loch in Lochaber.

A spokesperson said: “Initial investigations indicate that the intense weather conditions caused mooring anchors to drag, and this brought the pen net into contact with a flotation pipe subsequently causing a tear.

“Despite challenging conditions, Mowi swiftly informed the relevant authorities, including local fisheries stakeholders and is now undertaking a full investigation.”

Ms Burgess said: “The escaped fish pose a serious threat to Scotland’s wild salmon.

“When farmed salmon breed with wild fish, it weakens the wild population and reduces their chances of survival.

“Every escape adds to the pressure on our already depleted wild salmon populations.”

WildFish Scotland has also raised concerns around farmed and wild salmon breeding.

It described the incident as one of the biggest in recent years.

The Scottish government said it was committed to working with industry, conservation groups and communities to ensure fish farming had a “sustainable and prosperous” future.

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Jaguar Land Rover

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