Brasília – Risk rating agency Fitch Ratings announced this Thursday (10th) it has kept Brazil’s BBB grade, with a stable outlook. That means there should be no changes in the short term. Brazil was rated “investment grade,” meaning the country is unlikely to default and investor confidence levels remain stable.
According to Fitch Ratings, the grade reflects the diversity of Brazilian economy, the capacity to absorb shocks and a sufficiently capitalized banking system. These factors are offset by relatively high public indebtedness, low savings and investment and limited improvement in competitiveness and fiscal flexibility.
The agency also mentions the weak growth of the economy and inflation rate near the top end of the target (6.5%). Fitch projects the average growth of Brazilian economy around 2%, between 2014 and 2016. On the election to be held October this year, the agency says the next government will face the challenge of making adjustments in order to reduce inflation and strengthen public finance.
*Translated by Rodrigo Mendonça
