(Adds Coutinho's comments on investment outlook)
By Silvio Cascione
BRASILIA May 27 Loan requests at Brazil's state
development bank, BNDES, dropped sharply in the first
four months of the year as business confidence sagged, bank
President Luciano Coutinho told lawmakers on Tuesday.
But that does not necessarily set a trend for the rest of
the year, he said, adding that he expects to see rising
investment in coming years as the fundamentals of Brazil's
economy remain solid.
Requests for loans fell 19 percent to 57.240 billion reais
($25.58 billion) between January and April, down from 70.886
billion reais in the same period of 2013.
"There has been a drop... which to some extent reflects the
increasingly volatile expectations of the private sector,"
Coutinho said. "It is not possible yet to say that is the trend
for the year, but this is the latest picture that we've got."
Coutinho noted that the outlook for investments in Brazil
over coming years has improved from late 2013, as the
instability due to the tapering of economic stimulus in the
United States waned and work on big infrastructure projects
sponsored by Brazil's government gained speed.
"Over the past two to three months, the currency has
stabilized and there has been greater understanding that we have
a well-equipped central bank and inflation has been under
control," Coutinho said in his closing remarks before Congress.
Business confidence in Brazil has plummeted to the lowest
level since the 2008-09 global financial crisis after a barrage
of stimulus measures by President Dilma Rousseff's government
failed to revive economic growth but fueled inflation.
After a surprise rebound in late 2013, economists estimate
Brazil's economic growth slowed nearly to a halt at the
beginning of this year, according to a Reuters poll.
Loan disbursements increased slightly in the first four
months of the year to 58.852 billion reais, Coutinho said.
Coutinho reiterated that he expects Brazil's treasury to
make gradual transfers by year-end to support lending by BNDES,
but he did not specify how much.
($1 = 2.2372 Brazilian reais)
(Reporting by Silvio Cascione; Editing by Chris Reese, Peter
Galloway and Dan Grebler)