São Paulo – Credit rating agency Moody´s revised up its outlook for Brazil’s rating on Wednesday (1), which is currently at Ba2, two notches into junk. The credit score remains the same, but the credit outlook was raised to “positive” from “stable”, meaning the rating could improve in the future.
According to the National Treasury of Brazil, this decision marks Moody’s first move since 2018 when the outlook shifted from negative to stable, further “reinforcing the improvement in the credit rating trajectory observed since 2023”, with rating upgrades by both S&P and Fitch. If the change in grade happens, Brazil will be one step away from returning to investment grade, a significant landmark for the country economic stability indicators.
“If the change in grade happens, Brazil will be one step away from returning to investment grade, a significant landmark for the country economic stability indicators,” the Treasury said.
Finance Minister Fernando Haddad wrote on social media platform X that Moody’s revision is the recognition of the change for the better of the Brazilian economic outlook. The country is recovering its economic, social, and environmental credibility despite the global economic deterioration scenario, adding, “We have much to do.”
Investment in Brazil
The investment grade certifies that the countries are not likely to default on public debt. Below comes the speculative grade, when there is a high probability that the borrower will default on the repayment of principal and interest.
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Superior credit ratings reflect enhance creditworthiness, allowing countries to issue debt at reduced interest rates.
Translated by Guilherme Miranda