UPDATE 1-Brazil raises interest rates on subsidized credit lines
By Luciana Otoni
BRASILIA Dec 11 (Reuters) - Brazil will raise interest rates on some state-subsidized credit lines in 2014, Finance Minister Guido Mantega said on Wednesday, withdrawing part of the stimulus that helped boost investments but also hurt public finances this year.
Interest rates on loans for the purchase of capital goods and trucks will climb to 6 percent per year, from 4 percent, while a special credit line for exports will bear rates of 8 percent a year, up from 5.5 percent.
The subsidized credit lines are part of a special program by state development bank BNDES to lower the cost of capital goods for industries and farms.
The program spurred investment and boosted a tentative economic rebound in the first half of this year, but also alarmed ratings agencies by lifting Brazil's gross debt.
Brazil's benchmark lending rate is currently at 10 percent after six consecutive increases this year.
Mantega had already announced that the credit line program would be extended into 2014 with some adjustments, but carmakers and machinery builders had been asking for further details to carry on with their investment plans for next year.
As he announced the changes, Mantega said Brazil's economy is on a path of gradual recovery that should continue in 2014 and the government is committed to strong fiscal results this year and next.
Mantega has previously forecast average growth of 4 percent per year over the next decade - a rate Brazil has not managed once under President Dilma Rousseff. In the third quarter, the Brazilian economy contracted for the first time since 2009.
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