Temer set BNDES back 20 years.

247 - The Brazilian National Bank for Economic and Social Development (BNDES) is expected to disburse 13% less in 2017, according to the bank's president, Paulo Rabello de Castro. Disbursements are expected to be around R$ 77 billion, reflecting the still modest appetite for credit among Brazilian businesses. If the projection is confirmed, it will be the lowest level since 1999, when R$ 68,2 billion was disbursed (in updated values). Although Paulo Rabello estimates that demand for resources will grow again in 2018, reaching R$ 97 billion, economists believe it is time to rethink the bank's role.

In a scenario of low interest rates, repayment of funds to the National Treasury, and less room for subsidized credit — with the adoption, starting in January, of a new rate for its loans — these economists argue that BNDES should focus on projects that bring more social gains than economic returns, such as those related to the environment, health, and innovation.

By the end of September, the bank's disbursements totaled R$ 49,9 billion. According to Paulo Rabello, the R$ 77 billion mark should be reached with the acceleration of demand for working capital from micro, small and medium-sized enterprises. For next year, he predicts a surge in disbursements, considering GDP growth of 3%.

Since its creation in 1952, BNDES has gone through several phases. Starting in 2009, it began to inject cheap credit into the national industry to face the global economic crisis. This was only possible with an injection of over R$ 400 million from the Treasury into the bank. Given the imbalance in public accounts, this debt is now being demanded by the federal government. BNDES has already returned R$ 178 billion to the federal government and is negotiating to return another R$ 130 billion in 2018. Experts believe that the pressure on the bank's cash flow will contribute to a less aggressive BNDES going forward.

The information is from Report by Danielle Nogueira in O Globo.