The Downgrade of the Credit Rating

BRAZIL ECONOMICS - Report 14 Sep 2015 by Affonso Pastore, Cristina Pinotti, Marcelo Gazzano and Caio Carbone

To anyone who pays a minimum attention to the indications given by Brazil’s CDS quotations, it has long been clear that the country – sooner or later – would lose its investment grade rating. Last month, its quotations had already climbed well off the average relationship between the S&P credit rating for each country and its respective CDS quotation (Graph 1). The situation got even worse after the government sent a budget bill to Congress with a primary deficit, dashing all hopes that it might act to end the unsustainable growth of the public debt. S&P not only lowered Brazil’s credit rating but also affirmed a negative outlook, meaning that a new downgrade might well occur. The clumsy way the administration has been reacting, giving clear indications it has no strategy for a fiscal adjustment, is working to accentuate the intensity and duration of the recession, making the perspectives for renewed growth even more dire.

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2024 GlobalSource Partners. All rights reserved. This report is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This report is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this report or its contents.