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Chief of BNDES Bank Guarantees Hot Economy for Brazil in Coming Months

The president of Brazil’s National Economic and Social Development Bank (BNDES), Guido Mantega, said that he discerns “clear signs” that the Brazilian economy will heat up in the second half of the year.

“All the conditions favorable to this are in place, and the bank has firm indications that this will occur,” he affirmed.


As one of the indications, he referred to the number of consultations registered in June, 225% more than in June, 2004.


According to Mantega, the BNDES is already getting projects that he expects to be approved in the steel, paper and cellulose, petrochemical, and telecommunications sectors, although there are also loan requests from small and medium-size companies.


He announced the approval of a US$ 420 million (1.34 billion reais) loan to the TIM Cellular Company to expand its coverage area and increase the capacity of and modernize its service network. In Mantega’s opinion, this project should have a positive impact on the bank’s performance in July.


Mantega said that, since the bank is responsible for 60% of the country’s long-term credit activity, this is a good measuring instrument.


“With this, I want to refute the prognoses that are saying that the political crisis is having an effect on investments. This is not true. It is not correct. It doesn’t correspond to the data we are verifying here at the bank.”


Mantega guaranteed that the analysis of performance data in June reveals that “the crisis will be brief and is not affecting the economic indicators and the disposition of investors.”


He believes that this year’s BNDES investment budget of US$ 25.3 billion (R$ 60 billion) can be executed, since, in general, one third is allocated in the first half of the year, and two-thirds, in the second half.


“Chiefly because there was a monetary policy whose objective was to decelerate the economy, and it did in fact decelerate in the first half of the year.


“But now there is a reversal, a change, as a result of a situation in which inflation is under control, and monetary policy will consequently adjust to this favorable context.”


ABr – www.radiobras.gov.br

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