RIO DE JANEIRO (Reuters) - Brazil’s BNDES development will bring forward almost 10 billion reais ($2.5 billion) in dividend payments to the government this year to help shore up the public finances, the bank’s chairman Carlos Thadeu de Freitas told Reuters.
Faced with a fiscal crisis which will yield yet another government budget deficit this year, and weak demand from companies for BNDES funds, the bank said it will do its bit to help.
The BNDES had already committed to bringing forward 4.9 billion reais of dividends to the government in 2019. But approval of a further 4.6 billion reais will bring the total up to 9.5 billion reais, Freitas said.
“The BNDES is playing its part as a 100% government bank by helping out on the fiscal side. Dividends help reduce the deficit,” Freitas told Reuters late on Friday.
The BNDES plans to return more than 120 billion reais to the Treasury this year, funds which were loaned to the bank by previous governments. Of that total, the government has already received 70 billion reais and should get another 30 billion reais soon.
The government’s 2019 primary budget deficit goal, before interest payments are taken into account, is around 139 billion reais. Treasury secretary Mansueto Almeida said earlier this month that it is on track to come in below 100 billion reais.
Reporting by Rodrigo Viga Gaier; Writing by Jamie McGeever; Editing by Daniel Wallis