RIO DE JANEIRO, May 14 (Reuters) - The Brazilian Treasury will lend about 30 billion reais ($13.57 billion) to state development bank BNDES this year, Communications Minister Paulo Bernardo said on Wednesday, reducing annual transfers whose hefty size has been criticized as weighing on the country’s fiscal accounts.
Last year the government loaned 39 billion reais to BNDES to increase cheap credit to big businesses in a bid to spur an economy has been stuck in a rut since 2011.
President Dilma Rousseff has promised to gradually cut loans to BNDES, but has defended the bank’s role as the country’s main provider of long-term corporate loans.
Bernardo spoke at a telecommunications event in Rio de Janeiro, where BNDES’ president Luciano Coutinho also said that the 30-billion-reais loan will be enough for the bank this year.
The transfers, which increased greatly since the 2008-2009 global crisis, could reverse the downward path of the country’s debt burden and put the government’s fiscal savings goals in jeopardy, say analysts at Standard & Poor‘s, Moody’s and Fitch, the three leading credit rating agencies, in views shared by some other economists also on Wall Street.
In March, S&P cut Brazil’s credit rating to BBB minus, its lowest investment-grade level, citing a deterioration in the country’s fiscal performance and prospects of subdued economic growth in coming years..
Lower credit ratings tend to lead to higher borrowing costs. ($1 = 2.2115 Brazilian Reais) (Reporting by Rodrigo Viga Gaier; Writing by Alonso Soto Editing by W Simon)