Brazil increases subsidized loans for 2014 to boost growth

SAO PAULO Mon Dec 30, 2013 6:27pm EST

SAO PAULO Dec 30 (Reuters) - Brazil will offer an additional 50 billion reais ($21.2 billion) in subsidized credit lines for industries and farms in 2014 as the government tries to boost economic growth, the finance ministry said on Monday.

Finance Minister Guido Mantega had previously said the loans, part of a special program from state development bank BNDES that lowers the cost of some goods for businesses, would continue through 2014 with some adjustments.

The program spurred investment and boosted a tentative economic rebound in the first half of 2013, but also alarmed ratings agencies by lifting Brazil's gross debt.

The loans can be used on goods and services ranging from farm equipment and trucks to electricity and are meant to "give incentive for the expansion of national industry," according to a statement from the finance ministry that gave details on the monetary council's meeting about the loans.

A total of $372 billion reais in credit will now be available in 2014, the statement said, up from the $322 billion that had been available as of October.

The government raised interest rates on capital goods and trucks for 2014 in order to ease the effect of the additional stimulus on public finances.

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