Brasília – Credit rating agency Standard & Poor’s (S&P) has downgraded Brazil’s public debt rating from positive to stable. The decision occurred four months after the agency had suggested it could upgrade Brazil’s rating. A stable perspective means the agency doesn’t intend to change the country’s rating over the next couple of years.
Currently, S&P gives a BB- rating to Brazil, three degrees below the investment grade, a guarantee that the country is not in risk in defaulting on its public debt. A positive perspective indicates that the rating could be upgraded.
S&P mentioned some factors justifying the decision. First, the slowdown or decrease in the Gross Domestic Product (GDP) this year due to the coronavirus crisis. Secondly, the higher spending to face COVID-19 and prevent mass layoffs. The agency mentioned the political tension as an aggravating circumstance, with “uncertainty regarding the capacity to uphold structural reforms after the pandemic has passed, given the continuous disagreements between the Executive and Legislative power.
Translated by Guilherme Miranda
