Agencies debunk pessimistic wave against Brazil.
After Moody's announced that it does not expect to change Brazil's risk rating, Fitch also says that Brazil's rating could be maintained this year, with growth projected to rise to 2,5% and a stable primary surplus of 2% of GDP; as for Standard & Poor's (S&P), the director warns that even the country's weak growth would not be the main reason for a review: "We look at the direction of economic policy."
247 - After Moody's announced that it does not expect to change Brazil's risk rating, other agencies maintained their outlook for Brazil in 2014, overturning pessimists.
Fitch Ratings' director for Latin America, Shelly Shetty, stated that Brazil's rating could be maintained this year if growth and fiscal management conditions remain in line with the rating agency's forecasts.
She estimates that the country's growth will increase from between 2,2% and 2,5% in 2013 to 2,5% this year; and that the primary surplus will remain stable during this period, at 2% of GDP. "These economic conditions will be consistent with the current rating," she highlighted. Brazil's sovereign rating is BBB and the outlook is stable, indicators that have been maintained by the institution since 2011. She estimates that gross public debt may have reached 59% of GDP last year and will maintain that mark in 2014 as well.
Regarding Standard & Poor's (S&P), the rating could still be reassessed. The director responsible for Sovereign Ratings at S&P, Joydeep Mukherji, said that there is no single main factor capable of triggering a downgrade of Brazil's risk rating. Even the country's weak growth would not be the primary reason. "We look at the direction of economic policy. If President Dilma Rousseff conducts a successful airport auction, that's good, but it's not a factor that will change the rating."