BNDES Boosts Support for Brazil’s Industrial Sector Amid Economic Strategy Shift

Surge in Credit Approvals for Industrial Sector
Brazil’s development bank, BNDES, has ramped up its credit allocations for the industrial sector as part of the government’s broader effort to strengthen manufacturing and diversify the economy. In the first nine months of 2023, BNDES approved R40.8 billion (approximately $7.04 billion) in credits, marking an 8% increase over the same period in 2022 and a significant 92% rise compared to the first nine months of 2022. This increase in credit approvals is seen as a key measure in revitalizing Brazil’s industrial base, promoting innovation, and ensuring sustainable growth in the sector.

A Shift in Priorities: Industry Takes the Lead Over Agriculture
In a historic shift, the industrial sector received a larger share of BNDES’ credit approvals than agriculture in 2023. For the first time since 2016, the industrial sector received 27% of the total credit approvals, surpassing agriculture’s 26%. This strategic move underscores the Brazilian government’s new industrial focus, which is aimed at reducing the nation’s over-reliance on agriculture. This shift is part of the government’s comprehensive strategy, which includes a target of R300 billion in investments for the industrial sector by 2026. Of this amount, R250 billion is expected to be allocated by BNDES. The government’s support signals a long-term vision for a more diversified and resilient economy.

BNDES’ Role in Industrial Expansion and Economic Diversification
The increased funding from BNDES reflects a broader policy initiative to boost the industrial sector’s capacity and competitiveness. In January 2023, the Brazilian government unveiled a new industrial plan aimed at fostering economic diversification and reducing dependency on commodity exports. The plan, which seeks to attract investments into sectors such as steel, renewable energy, and high-tech manufacturing, is expected to contribute to job creation, economic stability, and industrial modernization. With R250 billion from BNDES, this initiative is central to the government’s efforts to drive industrial transformation and establish Brazil as a more competitive player in the global manufacturing arena.

Focus on Long-Term Industrial Growth
According to Vice-President Geraldo Alckmin, the increase in BNDES’ support for industry is key to the administration’s long-term goals for industrial growth and economic diversification. By focusing more on manufacturing, Brazil is positioning itself for sustainable growth, job creation, and greater competitiveness on the global stage. The shift towards industrial funding aligns with the government’s efforts to modernize the country’s industrial infrastructure, foster technological innovation, and ensure Brazil’s economic stability in the face of global challenges.