Brasília – Standard & Poor’s (S&P) credit rating agency has downgraded Brazil’s public debt rating from positive to stable. The decision came four months after the agency suggested upgrading Brazil’s ranking. A stable perspective means that agents do not intend to change the country’s ranking for the next few years.
At present, S&P assigns a BB- rating to Brazil, three degrees below the investment rating, a guarantee that the country does not risk defaulting on its public debt. A positive perspective shows that ranking can be improved.
S&P mentioned several factors that justified the decision. First, slowing or decreasing Gross Domestic Product (GDP) this year due to the coronavirus crisis. Second, the higher expenditure to deal with COVID-19 and prevent mass layoffs. The agency called political tension worsening, with “uncertainty about the capacity to enforce structural reforms after the pandemic passed, given the ongoing disagreement between the executive and legislative powers.
Translated by Guilherme Miranda
Marcello Casal Jr./Agência Brazil
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