January 11, 2018 / 7:36 PM / a year ago

Brazil state bank BNDES sees $31 bln in loan disbursements in 2018

RIO DE JANEIRO, Jan 11 (Reuters) - Brazilian state development bank BNDES on Thursday forecast a roughly 40 percent increase in its loan disbursements this year, as an economic recovery boosts corporate investment plans.

BNDES is forecasting loan disbursements of 100 billion reais ($31 billion) in 2018, up from 70.7 billion reais in 2017, director Carlos Costa said at a press conference.

Funding for exports and working capital, as well as loans to sanitation and transportation projects, are likely to account for the bulk of the increase, he added.

His remarks suggest a long-awaited revival of capital spending, underpinned by record-low interest rates, is likely to accelerate this year despite uncertainty stemming from a wide-open presidential election.

BNDES will increase lending even as it pays back 130 billion reais worth of loans from the National Treasury in 2018, following a similar 50 billion real repayment last year.

The federal government is counting on such repayments to meet budget rules as it struggles to pass belt-tightening measures in Congress.

Costa said BNDES will repay the 130 billion reais in several installments through the year, as it currently has only 30 billion reais on hand to pay the Treasury.

$1 = 3.22 reais Reporting by Rodrigo Viga Gaier; Writing by Bruno Federowski, Editing by Rosalba O'Brien

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