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03.12.08
» Disbursements made by BNDES may
surpass BRL 80 billion in 2008, 25% higher than last year
· Domestic demand commands economic growth
· Investment expansion should be maintained throughout the next four years
The cycle of economic growth that started in 2004 is reflected in the significant increase in BNDES disbursements. In 2007, releases by the Bank broke a fourth consecutive annual record, reaching BRL 64.9 billion, almost twice the sum spent in 2003. In 2008, the expansion should continue at a brisk pace, and expectation are that the Bank's expenditures will grow at least 25% as compared to last year, closing out the year with loans in above BRL 80 billion.
This estimate was made by APE (the Bank's Area of Economic Research and Monitoring) in the publication "BNDES Quarterly", which analyzed the performance of the institution during the previous year and made projections for 2008.
Since 2004, the Brazilian economy has been going through its longest expansion period in the last 30 years. With its 2007 performance, the country recorded 24 consecutive quarters of growth, something that had not occurred since the 70s. According to APE estimates, the current investment cycle should continue over the next four years.
Thanks to the consolidation of macroeconomic stability, it is the domestic demand that has been driving the growth process in the last two years. The expansion of the internal market has been pushed by a strong acceleration of the Gross Formation of Fixed Capital (GFFC). Investments have increased in such a way that in the last couple of months it has surpassed, by a large margin, the growth of the Gross Domestic Product (GDP).
This investment acceleration was accompanied by a major change in profile. In industry, the projects that in the 90s and early 2000s were basically addressed to the modernization of production capacity (brownfield), have given way to capital investments in new large-sized plants (greenfield, where basic raw materials sectors - steel, pulp and paper, petrochemicals - are the highlights.
Changes in investment characteristics can also be seen in infrastructure, with the implementation of large-sized projects in electric energy, logistics and sanitation. The performance of the infrastructure sector in 2007 was also marked by the launching of the Growth Acceleration Program (PAC).
In sectorial terms, BNDES's expectations are, in the next four years, of a 13.2% average growth rate per year in infrastructure investments and a 12.4% growth rate per year in industry, as compared to the 2003/2006 period. In this scenario, the country's investment rate is expected to reach approximately 21% of the GNP in 2010.
Thus, in light of the performance in the last few decades, the current Brazilian economy growth cycle shows, among other characteristics, a particularly interesting peculiarity: investment expansion at a much higher pace than that of the GDP. This not only ensures that the expansion of the aggregated demand, in the medium term, will be more sustainable, but also makes the respective adjustment of the offering conditions easier in the course of time.
BNDES, a development Bank aimed at long-term projects, has as its own characteristic the fact that its releases are usually made along the 24 months following the signature of the contract, in step with project implementation. The Bank is thus an important antecipied indicator of investment behavior in the country.
At year-end 2007, the difference between BNDES approvals and disbursements accumulated in 12 months reached BRL 33.9 billion, the highest amount ever recorded, and represented 52% of the Bank's total disbursements last year. This indicates that there is a considerable pressure of effective demand for BNDES resources, a situation that reflects the strong expansion of investments taking place in the Brazilian economy - signposting it as a sustainable movement.
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