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Interest in capital goods loans at Brazil's BNDES up in Q1 -CEO
April 24, 2017 / 5:55 PM / 8 months ago

Interest in capital goods loans at Brazil's BNDES up in Q1 -CEO

RIO DE JANEIRO, April 24 (Reuters) - More Brazilian capital goods producers made consultations for potential loans with state development bank BNDES in the first quarter, in a clear sign of economic recovery, Chief Executive Officer Maria Silvia Bastos Marques said on Monday.

Consultations increased 25 percent from the year before, while approvals rose 32 percent, Bastos said at an event in Rio de Janeiro. Disbursements to provide working capital jumped 345 percent, she added, without giving details on the figures.

“We are seeing a gradual resumption in demand for investments,” Bastos said.

The figures reinforced expectations of a pickup in capital spending as falling interest rates and improving business sentiment lift the economy from its deepest recession on record.

Still, investors and economists widely agree that any economic rebound is likely to be slow, with households struggling to cut debt amid double-digit unemployment rates.

Measures taken by BNDES to cut credit subsidies, which for years weighed on the government’s budget and boosted public debt, could also hamper demand for investments.

Last month, the development bank said it would introduce a new benchmark lending rate pegged to yields on inflation-linked bonds, which in five years would match the government’s funding costs. (Reporting by Rodrigo Viga Gaier; Writing by Bruno Federowski; Editing by Meredith Mazzilli)

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