Goal for Brazil: rating agency raises the country's rating.

The Japanese credit rating agency Rating and Investment Information (R&I) has raised Brazil's rating from BBB- to BBB, with a stable outlook. The agency's statement affirms that, with the emergence of middle-income families, "a robust domestic market is being created in Brazil." According to R&I, the risk of the Brazilian economy suffering severely from drastic changes in the external environment has decreased.

"Inflation is easing and, thanks to strict adherence to the fiscal responsibility law, the country's fiscal position remains favorable," the note says. While the global economic scenario has become more turbulent, Brazil's fiscal and economic management has greater stability, R&I continues.

For Brazil's credit quality to improve again, the government needs to eliminate supply-side bottlenecks to economic growth by increasing investment and making efforts to further mitigate inflationary pressures, says the Japanese agency. This requires raising the domestic savings rate, which is currently below 20% of Gross Domestic Product (GDP), and increasing the investment ratio so as not to cause a deterioration in the current account balance, it adds.

The agency states that the Dilma Rousseff government "has firmly maintained fiscal discipline in line with the Fiscal Responsibility Law." For 2012, R&I points to some concerns, such as the pressures of increased public sector salaries and pensions, in a scenario of double-digit growth in the minimum wage and the expansion of spending on infrastructure construction, such as airports, railways, and stadiums for the 2014 World Cup. "Even so, R&I believes that the possibility of the country's fiscal discipline suffering serious erosion is small."

R&I had upgraded Brazil to investment grade in April 2008. At that time, the agency lowered Brazil's rating from BB+ to BBB-.