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In addition, higher finance costs will eat into profit growth, a fact that seems yet to be recognised in buoyant forecasts for 2009.
The Brazilian state-run oil company Petrobras reported Friday that second-quarter net profit fell 20percentt compared with the year earlier on lower global oil prices and higher finance costs.
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Higher financing costs, he said, would have an impact on early profits.
Higher financing costs will force lawmakers to make deeper budget cuts, or issue more bonds.
And higher financing costs and tighter lending terms caused mortgage underwriting to grind to a halt.
Even if it does raise that money, higher financing costs could erode or erase the expected profits.
Higher financing costs also tempered the zeal for overbuilding and for credit-based purchases of cars, furniture and appliances.
Higher financing costs on the interbank market make it harder for them to be accommodating to customers.
The real strength in the report lies in its devastating analysis of the cost to taxpayers of meeting the private sector's higher financing costs.
Amid higher financing costs, mounting losses and lawsuits over its lending practices, the mortgage lender's survival has been in question for months.
The loss expanded to $222 million, or 27 cents a share, from $69.6 million, or 10 cents a share, a year earlier, because of declining sales and higher financing costs, the company said.
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