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The Worst Is Over, Says Brazil’s Development Bank Chairman

Brazil's cargo transportation Brazil's BNDES (Brazilian Economic and Social Development Bank) had  record investments in the first quarter. The institutions grew by 13% over same period of last year, having totaled around 19 billion Brazilian reais (US$ 8.7 billion).

The performance was driven by the infrastructure sector, with expansion of 21.4% and 6.8 billion reais (US$ 3.1 billion) in funds.

In the accumulated result for the last 12-month period ending in March this year, disbursements by the BNDES were also record-high for the period, having totaled 94 billion reais (US$ 43 billion), growth of 35% over the preceding 12-month period.

The chairman of the BNDES, Luciano Coutinho, said that, based on the figures, "one may already say that the worst part of the international crisis in Brazil is behind us." "I believe that businessmen's expectations are beginning to improve. Entrepreneurs are aware that the Brazilian economy is capable of sustained growth, that the domestic market has potential for expanding and resuming growth this year," he claimed.

To Coutinho, that does not mean that, "as a public banker," he should stop working and putting on an effort. "We must work to sustain economic growth. However, the impression that one has is that, from the perspective of business calculations, things are starting to get better," he said.

The BNDES chairman disagreed with the forecast of the International Monetary Fund (IMF), which points to a 1.3% reduction in Brazil this year. "I believe in a positive figure of between 1.5% and 2%. We are going to work for that," he stated.

Coutinho also claimed that the important thing is that a consensus has already been reached that the Brazilian economy should end the last quarter of 2009 and start 2010 with a growth rate of between 3% and 3.5%, "and maybe even 4%. The certainty that economy will grow faster is gaining strength among entrepreneurs."

He forecasted that the infrastructure sector is going to continue expanding. The oil and gas production chain is also expected to "help the economy get back to growth." The same applies to the civil construction industry. He preferred not to celebrate ahead of time, however. "I believe that we must pay much attention and make sure that the economy has the conditions for resuming expansion," said Coutinho.

BNDES disbursements for the industry grew 5% in the first quarter this year, having totaled 7.9 billion reais (US$ 3.6 billion). Luciano Coutinho said that the industrial sectors demanding the least from the bank are those more linked to exports, the highlight being the metallurgical-mineral sector. "The industry is more cautious."

He, however, said that "no one has canceled their investment plans, they have only postponed it."

The figures disclosed by the chairman of the BNDES also show recovery in the line of financing of subsidiary company Finame, for purchases of machinery and equipment, "was stronger than expected. It was quite a surprise, attesting to the vitality of the economy." Disbursements by Finame grew 21.7% from April 2008 to March 2009, having amounted to 22 billion reais (US$ 10 billion).

The superintendent of Indirect Operations at the BNDES, Cláudio Bernardo Guimarães de Moraes, declared that from April onwards, the Finame should free more funds, with the entry into force of an increase in its share in the bank, from 80% to 100%, in financing for large companies. In the past, the share used to by 100%, but was reduced to 80% last year, as a result of rising demand due to scarce credit.

ABr

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  • Show Comments (4)

  • Ric

    You are no doubt correct
    Another bunch of resets will come up just as unemployment benefits run out for thousands.

  • VinnyCarioca

    Ric
    Greeting from Los Angeles , where unemployment is at 12% (not including illegal aliens). I am still continuing to see massive layoffs here in SoCal, and my manufacturing business serves the full spectrum of industry. I live in a very well to-do area and I’m seeing condo prices really starting to plummet, and given continued unemployment, houses should follow.
    The sticker that you saw in the Times has been around for quite a while now. You’ll notice that the vast majority of foreclosures are located in the interior but will the massive contraction of credit, the problem will hit all areas. I don’t think you have much to worry about in Laguna Beach though.
    My bank had the audacity to ATTEMPT to decrease my platinum Visa credit line by 50%. I have stellar credit and a very low balance to limit ratio. The representative implored me not to take it personally because the decision (according to him) was essentially made by a computer and had no reflection on my financial responsibility, or lack there of. They immediately restored my limit but, if this guy was telling truth, banks are not making informed decisions…..which doesn’t portend good things to come.
    My belief is that after this counter trend rally in the stock market peaks, the ride down is going to be sharp and there will be no decoupling. imho

  • Ric

    In That Case I Really Must Hurry Back
    And greetings from Laguna Beach, where the crisis in still in its infancy. The sticker on todays LA Times advertises a foreclosed home auction at the Pomona Fairplex. Pages of repos in the classifieds. Best investment according to some experts is not gold and silver but guns and ammo. Businesses quitting, car dealers going out of business, increasing numbers unemployed.

    On balance, still tons better than life in Brazil. AIrports are less crowded. While Belem and Manaus are down about a third in passengers, LAX is down less than 20% and a more pleasant place that it is normally.

  • VinnyCarioca

    The Worst Is Over, Says Brazil’s Development Bank Chairman
    EXCELLENT NEWS!!!!!
    I’m going all in. 😀

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