April 5, 2016 / 3:16 PM / 3 years ago

Bankruptcy filings more than double in Brazil as recession deepens

An anti-government demonstrator attends a protest against Brazil's President Dilma Rousseff in downtown of Rio de Janeiro, Brazil, April 4, 2016. REUTERS/Pilar Olivares

BRASILIA (Reuters) - Bankruptcy protection requests in Brazil more than doubled in the first quarter from the year-earlier period, as businesses suffered from the highest borrowing costs in a decade and a steep recession dragged down revenue, credit research company Serasa Experian said on Wednesday.

Companies filed 409 requests for court protection from creditors last quarter, the highest number since the country enacted a bankruptcy law in 2005, Serasa said in a report. In the first quarter of last year, 191 companies sought bankruptcy protection, Serasa said.

“Brazil’s deepening recession and an increase in operational and financial costs have led to successive records in the number of bankruptcy protection filings,” Serasa said in the report.

Small-sized companies filed more than half of the first quarter’s requests.

Brazil’s economy has been going through the second year of what is expected to be its worst recession in more than a century. The central bank expects the economy to shrink 3.5 percent this year following a contraction of 3.8 percent in 2015.

Brazil’s benchmark interest rate, at 14.25 percent, is also among the highest of the world’s major economies.

Reporting by Silvio Cascione; Editing by Jonathan Oatis

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