MercoPress, en Español

Montevideo, May 16th 2022 - 08:57 UTC

 

 

Brazilian government optimistic about reforms and the economy's performance forecast

Friday, December 6th 2019 - 08:52 UTC
Full article
At least two of the three major ratings agencies, Moody’s, S&P’s and Fitch - will hopefully put Brazil on a positive outlook in the coming months At least two of the three major ratings agencies, Moody’s, S&P’s and Fitch - will hopefully put Brazil on a positive outlook in the coming months
Treasury Secretary Mansueto Almeida warned tax reform, the government’s next major economic reform, may take longer than business and markets would like. Treasury Secretary Mansueto Almeida warned tax reform, the government’s next major economic reform, may take longer than business and markets would like.

The Brazilian government’s commitment to getting public finances in order and maintaining strict fiscal discipline will lead to the country’s sovereign credit rating being upgraded, Treasury Secretary Mansueto Almeida said on Thursday.

At least two of the three major ratings agencies - Moody’s, Standard & Poor’s and Fitch - will hopefully put Brazil on a positive outlook in the coming months, he said, a step toward restoring the country’s investment-grade status.

But he warned that tax reform, the government’s next major economic reform push after pension reform was passed this year, may take longer than he or business and markets would like.

Still, Brazil’s economy and public finances are stronger than the government had hoped for, he said, and that the deficit and national debt are both going into next year on a downward path.

“Everyone thought our (gross) debt would break above 80% of GDP. But it could end 2019 very close to where it was last year,” he told an XP Investimentos event in Sao Paulo, adding that a ratings upgrade will be a natural consequence and reward for the government’s efforts.

Brazil’s gross national debt stood at 78.3% of gross domestic product in October, compared with a record 79.7% in August and 77.2% at the end of last year.

Moody’s rating on Brazil’s sovereign debt is Ba2, Standard & Poor’s is BB- and Fitch’s is BB-. All are non-investment grade, and all have a “stable” outlook.

Almeida said the government’s budget deficit will end this year around 60 billion to 80 billion reais, around half the government’s goal of 139 billion reais (US$ 33 billion).He also said he was confident large strides can be made in reforming Brazil’s complex tax system but cautioned that the years of debate over pension reform could be replicated.

“It’s such a complex system that anything we can do to move in the right direction, even on the margins, will be very positive,” he said.

The economy is expected to expand by around 2.3% to 2.4%, with the risks to that outlook likely to be to the upside rather than downside, he said, according to conversations he has had with market participants.

Categories: Economy, Brazil.

Top Comments

Disclaimer & comment rules

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!