Brazil has maintained its investment-grade credit rating in Standard and Poor's latest report due to its external liquidity position and improved fiscal dynamics.
Standard and Poor's analysts said in a statement that the BBB rating reflects the dramatic improvement in Brazil's external and public sector balance sheet. It also praised Brazilian government for their commitment to low inflation and a primary budget surplus "that has dispelled previous concerns over medium-term fiscal sustainability." The analysts added that declining interest rates will progress growth and reduce the cost of government debt, while Brazil’s change to a net creditor from a net debtor will help shield the country from global economic recession.
Brazil was appointed investment grade by Standard and Poor's at the end of April 2008 and in the latest report it has retained the credit rating. President Luiz Inacio Lula da Silva's popularity also will be supportive in pushing through policy changes needed to tackle "significant economic challenges" this year; however, S&P expects Brazil's economy to shrink 1 percent in 2009.
During an address at an investor conference in New York, Brazilian president contradicted predictions that the country's financial system will shrink in 2009 and said that it will expand this year as the economy was well prepared for the global financial crisis.
"We will grow in 2009 less than what we would like, less than we could grow if there was no external crisis. But we will grow," he said
The stable outlook on the BBB- long-term credit rating, the lowest investment-grade level, is "supported by the government's commitment to prudent macroeconomic policies," bloomberg .com reports.
0 comments:
Post a Comment