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Montevideo, November 12th 2018 - 23:27 UTC

Moody's lowers Brazil's sovereign bond rating to 'negative' from 'stable'

Wednesday, September 10th 2014 - 05:01 UTC
Full article 10 comments
However, the risk rating agency affirmed its rating on Brazil's government bond at 'Baa2', citing the country's continued resilience to external financial shocks. However, the risk rating agency affirmed its rating on Brazil's government bond at 'Baa2', citing the country's continued resilience to external financial shocks.
Under Ms Rousseff, Brazil’s economic growth has slowed to an average of less than 2% a year, with a recession taking place in the first half of 2014 Under Ms Rousseff, Brazil’s economic growth has slowed to an average of less than 2% a year, with a recession taking place in the first half of 2014

Moody's Investors Service lowered its outlook on Brazil's government bond rating to 'negative' from 'stable', saying the country's sustained low economic growth and worsening debt metrics reflected a risk of reduced creditworthiness.

“Moody's expects that Brazil's economy will continue to record low growth, and estimates that annual GDP increases are likely to remain below the country's potential of around 3%” the rating agency said.

Moody's, however, affirmed its rating on Brazil's government bond at 'Baa2', citing the country's continued resilience to external financial shocks.

The Moody's announcement adds pressure on whoever is elected president in October to change course on economic policy. Brazil will go to the polls with the debate about whether to tighten fiscal policy a hot campaign topic.

President Dilma Rousseff, seeking re-election, faces a strong challenge from her main contender Marina Silva who is keen to cut government spending.

Under Ms Rousseff, Brazil’s economic growth has slowed to an average of less than 2% a year, with a recession taking place in the first half of 2014, while heightened government spending led to a increase in the country’s debt burden.

“Should the deterioration in the country’s key credit metrics, in particular fiscal and government debt indicators, remain unchecked during the first two years of the incoming administration, this can significantly undermine Brazil’s sovereign creditworthiness,” Moody’s said in a statement.

Competing ratings firm Standard & Poor’s has already cut Brazil’s credit rating to the near junk status of “BBB-minus,” saying its decision reflected a combination of fiscal slippage, subdued economic growth and the prospect that no meaningful policy adjustment would occur before next month's elections.
 

Categories: Economy, Brazil.

Top Comments

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  • Brasileiro

    Brazil can not continue to provide data and information for Western rating agencies. The calculated rating by these agencies aims to encourage speculation not the sustainable development of countries.

    The perfect risk is ZZZ-.

    Speculation creates distortions in the pricing of securities and assets on a large scale can cause liquidity problems in domestic markets. USA and England use this system to destabilize economies for their own benefit, and of course, Money Laundering achieved through suspicious means or with the purpose of evading taxes.

    The sooner a country get rid of this plague of speculation, the better for your productive and sustainable development.

    https://www.youtube.com/watch?v=MeRBt6y-q4U&index=1&list=FLmXPTu1f8AdGlizWNiASx2A

    Sep 10th, 2014 - 09:46 am 0
  • golfcronie

    Your data is probably all lies anyway, you have to have some means of assessing a countries credit worthiness. Just look at your neighbour, I bet your country sided with Argentina at the UN. All banana countries did, did they not?

    Sep 10th, 2014 - 10:58 am 0
  • yankeeboy

    1. Nobody is asking Brazil to get loans from the civilized world. Stop reporting and pull out of the Int'l financial community.
    Nobody would care

    I think its funny how in just a few years the mighty BRIC block is now the laughing stock.
    I told ya.

    Sep 10th, 2014 - 11:23 am 0
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