* Brazil extends capital goods loan program for 2013
* President sees need for increased investment
* Ports overhaul program to be announced on Thursday
By Anthony Boadle
BRASILIA, Dec 5 President Dilma Rousseff
announced on Wednesday the extension of a government lending
program to boost purchases of capital goods, telling business
leaders Brazil must increase industrial investment if it is to
restore vigorous economic growth.
The world's sixth-largest economy grew much less than
expected in the third quarter, despite a barrage of tax breaks
and other stimulus measures taken by Rousseff this year.
Economists say the once-booming economy grew for a decade by
expanding consumption and Brazil must now raise investment
levels that are much lower than those of other emerging markets.
In a speech to the country's main industrial lobby, Rousseff
called on the private sector to invest more despite a period of
slow economic growth that is in its second year.
"Next year industrial growth will have to be much stronger.
The country needs to increase its investment rate," she said at
an event organized by the National Industry Confederation (CNI).
The speech, which focused on her government's efforts to
revive Brazil's sputtering economy following disappointing data,
was one of her most important policy addresses in recent months,
a senior government official said.
Rousseff said the Brazilian economy was in a period of
transition and the incentives provided by her government this
year needed time to have an impact on economic activity.
Brazil will extend through 2013 a special lending program by
the state development bank BNDES that lowers the cost of capital
goods for industries and agriculture, the president said.
Finance Minister Guido Mantega later said the credit line
would be increased to 100 billion reais ($47.50 billion) for
2013, with 85 billion reais coming from the BNDES and 15 billion
reais offered through the banking system.
The interest will be 3 percent in the first half of 2013 and
rise to 3.5 percent in the second half of the year, and loans
will be available for up to 10 years to buy capital goods such
as trucks and machinery, he said at a news conference.
Brazil must increase investment to grow by 4 percent next
year, Mantega said. Investment, which has declined for five
straight quarters, will pick up in the last quarter of this year
and grow by 8 percent in 2013, the minister said.
"Industry is growing again," Mantega said, predicting that
investment would grow by 8 percent in 2013, thanks to lower
labor, financial and energy costs.
GROUND LAID FOR GROWTH
Rousseff said the current favorable mix of record low
interest rates and the weakening of the Brazilian currency, the
real, prepared the ground for increased production.
Brazilian industrial output posted its first annual increase
in more than a year in October as a tax break on automobiles
helped support a nascent recovery in the country's beleaguered
But investment remains weak, raising doubts about the strong
recovery forecast by the government for next year.
On Tuesday, Rousseff's government exempted the country's
construction industry from paying payroll taxes. The aim is to
encourage investment in building by lowering the cost of
Rousseff's government on Thursday will unveil a new
regulatory framework aimed at attracting private investment to
modernize Brazil's overcrowded ports and eliminate bottlenecks
that raise transport costs and slow Brazil's exports.
By the end of the year, new private concessions will be
announced to upgrade airports, the president said.
The government also plans to extend a tax refund for
exporters of manufactured goods though the next year, an
administration official said at the event.
Rousseff also vowed to continue her efforts to reduce
Brazil's very high energy costs and complained about the
companies that have resisted the government's terms for the
renewal of concessions for power utilities.
"The federal government regrets the insensitivity of those
who do not appreciate the importance of this for the country to
grow in a sustainable way," the president, a trained economist,
told her audience of businessmen.
The government had hoped to lower energy costs for
residential and commercial consumers by an average of 20 percent
as of next February, helping curb inflationary pressures and
lowering a major cost that has made Brazilian industry less
But after several utilities rejected the government offer
for early renewal of their concessions in exchange for charging
lower rates, the government has acknowledged that it will only
be able to cut electricity costs by 16.7 percent.
Critics of the new electric power concession regime said it
would reduce investment needed to expand Brazil's generating