As part of its new plan dubbed ‘Bigger Brazil’, Brazil’s government has granted more than US$25bn to help Brazil’s industries cope with an overvalued currency and slowing output.

The measures, which were outlined by Brazil’s President Dilma Rousseff, will improve tax, credit and hiring conditions for the sectors that have been most affected by the currency war, while favouring Brazilian products over less-expensive imports.

Also in support of this, Brazil’s state development bank BNDES has launched the new stage of its Revitaliza programme to include more funding and better credit conditions for working capital in micro, small and medium-sized companies.

With a budget allocation of R$6.7bn (US$4.1bn) and a fixed interest rate of 9%, the programme will be effective until December 31, 2012.

New measures also include more funding and better credit conditions for working capital in micro, small and medium-sized companies.

In this vein, the budget of the BNDES Progeren programme will increase from the current R$3.4bn to R$10.4bn, with interest rates between 10% and 13% per annum.

To help provide financing for manufacturers, the government says it will also extend an existing R$75bn (US$48bn) credit line to BNDES until the end of next year.

The government’s announcement coincides with data showing that Brazil’s industrial production fell more than expected in June – down 1.6% from the previous month. Manufacturing output in Brazil has been mostly flat for more than a year despite a robust economic expansion.