Moody’s Investors Service downgraded the Baa2 Brazil’s credit rating to Baa3. The outlook was revised from “negative” to “stable”. With the lowering of the note, the country maintains its investment grade rating awarded to countries considered safe to invest, but with the lowest note in the classification, ie in the final phase of the scale, which guarantees the country the good paying stamp of debt.
According to Moody’s note, the reasons for the demotion of note are the economic performance below expectations, the growing trend of government spending and the lack of political consensus on fiscal reforms. To the agency, this set of factors “prevent the authorities achieve high primary surpluses sufficient to reverse the trend of increasing debt this year and next and will challenge your ability to manage to do it later.”
In a statement, Moody’s reported that, compared to previous expectations, the volume and the country’s debt payment capacity will continue to deteriorate in 2015 and 2016 to levels worse than that of other countries classified as Baa level. “Moody’s expects that the increasing debt burden only stabilize at the end of this government,” the statement said the rating agency.
According to Moody’s, Brazil has strengths that indicate classification in Baa3, still considered investment grade. Are the ability to withstand financial shocks due to the large international reserves, the government’s balance sheet with relatively limited to foreign currency debt exposure and debt securities held by non-residents, compared to other countries, and a large economy and . diversified
At the end of July, the rating agency Standard & amp; Poor’s had already announced change the perspective of Brazil’s credit rating from stable to negative.
With State Agency
With Agency Brazil
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