BRASILIA: Brazil’s government unveiled an industrial development plan for the next 10 years aimed at boosting growth in the sluggish economy with state credit and subsidies for companies, as well as local content requirements.

The new plan marks an effort by President Luiz Inacio Lula to kick-start the economy, using a playbook similar to one followed during his previous 2003-2010 presidential terms. But those efforts were ultimately undermined by falling commodities prices, and a sprawling corruption scandal that landed Lula in jail until his convictions were overturned.

The leftist Lula has called the plan a “re-industrialization” effort to change policies that focused on agricultural production and exports by Brazil, a major global food producer, at the expense of national industry during the administration of his hard-right predecessor Jair Bolsonaro.

The National Development Bank BNDES said it has earmarked 250 billion reais ($50 billion) in funds for Lula’s plan.

The boost for local industry was announced as the Brazilian economy, Latin America’s biggest and among the world’s 10 largest, has begun to show signs of cooling this year.

The economy will decelerate to 1.6% in 2024 versus 3.0% in 2023, according to the median forecast of 50 economists polled by Reuters Jan. 8-18. Forecasts for 2025 are showing 2% growth.

The government said sustainable financial instruments and credit for innovation, infrastructure and exports will be prioritized, in addition to subsidies, such as tax incentives.

The government is also planning a requirement for local content for public purchases under its restored Growth Acceleration Program (PAC), as well as for low-cost housing and school transport programs.

The plan also seeks to prioritize public infrastructure works, which “play an important role for industrial development”, the government said in a statement.

“To reverse the country’s early de-industrialization, the new policy foresees the articulation of several state instruments, such as special credit lines, non-refundable resources, regulatory and intellectual property actions, in addition to a public works and procurement policy, with incentives for local content,” it said.