Brazil's BNDES Increases Credit Approvals for the Industrial Sector

BNDES

Brazil's development bank, BNDES, has ramped up its support for the industrial sector, demonstrating the federal government's commitment to strengthening the country's manufacturing and industrial landscape.

Significant Credit Growth in 2023-2024

In the first nine months of 2023, BNDES approved R40.8 billion (approximately $7.04 billion) in credits for the industrial sector, an 8% increase compared to the R37.6 billion granted in the same period in 2023. This marks an impressive 92% increase over the amount approved in the first nine months of 2022.

The bank's total credit approval for the industrial sector reached R78.4 billion over the January-September period of 2023 and 2024, surpassing the R67.6 billion approved in the comparable periods of 2019-2022. This surge in credit approvals underscores the government's focus on revitalizing and expanding industrial capabilities in Brazil.

Industrial Sector Receives Priority Over Agriculture

For the first time since 2016, the industrial sector has received a higher percentage of BNDES’ total credit approvals than the agricultural sector. In 2023, 27% of BNDES’ credit approvals were allocated to industry, compared to 26% for agriculture. This shift in focus highlights the government's strategic priorities, aligning with Brazil’s broader plans to enhance its industrial sector and reduce dependence on agriculture.

The shift in credit allocation aligns with the Brazilian government's new industry plan, which was unveiled in January 2023. The plan aims for R300 billion in total investment in the industrial sector by 2026, with R250 billion of this sum expected to come from BNDES. According to Vice-President Geraldo Alckmin, this initiative is central to the federal administration’s goal of driving long-term industrial growth and economic diversification.

Conclusion: A Strong Focus on Industrial Expansion

The BNDES' increased support for Brazil's industrial sector is a clear reflection of the government's ongoing efforts to foster sustainable economic growth. By shifting financial priorities towards industry, Brazil is positioning itself for a more diversified economy, with long-term benefits for manufacturing, innovation, and competitiveness on the global stage.