The Moody’s agency raised the rating yesterday Brazil’s sovereign credit rating from Ba2 to Ba1, and maintained the positive outlook, due to the solid growth of the economy and recent economic reforms and prosecutors in the country.
With the improvement of the risk rating, Brazil is one step away from obtaining investment grade, which would place the country as a safe destination for investments.
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The president of Brazil, Luiz Inácio Lula da Silva.
Private file
In a statement, Moody’s highlighted Brazil’s commitment to fiscal objectives and debt/GDP stabilization trajectory.
He also pointed out that reforms such as tax reforms should improve Brazil’s business environment and keep the country’s economic growth strong in the long term.
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The new classification, however, indicates that the country is still in a “speculative degree” and that although it is now less vulnerable, it still generates uncertainty in the face of adverse financial and economic conditions. In a statement, the National Treasury stated that the improvement in the credit rating reflects the recognition of progress in public accounts.
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Since the rating agency cut Brazil’s rating to speculative in 2016, Moody’s had radically changed its perspective: It went from negative to stable in 2017, returned to negative months later and back to stable the following year. It affirmed the rating and stable outlook twice – in 2020 and 2022 – before raising the outlook in May. Fitch Ratings and S&P Global Ratings raised Brazil’s rating to BB last year, two notches below investment grade.
EFE
