Standard & Poor’s downgraded its Brazil’s credit rating outlook to ‘negative’ citing challenging political and economic circumstances.
The ‘negative’ outlook reflects a greater than one-in-three likelihood that the policy correction will face further slippage given fluid political dynamics and that the return to a firmer growth trajectory will take longer than expected.
The long-term foreign-currency sovereign rating was affirmed at ‘BBB-‘ and long-term local-currency rating at ‘BBB+’.
According to S&P, the ongoing investigations of corruption allegations against high-profile individuals and companies-in both the private and public sectors and across political parties have led to increased near-term political uncertainty.
The agency expects the contraction in real GDP to be deeper and longer. The economy is forecast to shrink 2 percent this year followed by no growth in 2016, before returning to modest growth in 2017.
The material has been provided by InstaForex Company – www.instaforex.com