The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Brazil looks over the edge

BNDES spending can only prop up the economy for so long.

As the bankers gather for the 50th anniversary IDB meeting in Colombia, those few that are allowed to travel down from New York might well see the weekend as a bit of light relief from the doom and gloom of the US.

Compared with the developed world, Latin America’s largest economy, Brazil, seems to be managing to stay afloat... for the moment anyway.

Inflation is 6% and falling, the real has held relatively steady through central bank intervention and a stockpile of $200 billion in foreign-currency reserves. The IMF is still predicting a positive growth rate of 1.8% despite the global recession. The development bank, the BNDES, and the state-owned banks continue to pump liquidity into the system and provide the government with an excellent channel to stimulate growth.

In January, the BNDES received commitments from the government to invest another R$100 billion ($42 billion) in 2009 alone. The money is earmarked for struggling corporates and infrastructure projects that will boost growth and satisfy pent-up infrastructure demand, especially in the southeast. The optimism surrounding Brazil is reflected in the performance of its equity market, which is up more than 8% this year.

But as the carnival cheer dies down in Rio some fear the economic hangover is about to kick in.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree