'Growing Middle-Income Countries'... S&P Upgrades Brazil Credit Rating Outlook

Raise from 'Anjeongjeok' to 'Geungjeongjeok'

International credit rating agency S&P has upgraded Brazil's credit rating outlook from 'stable' to 'positive,' stating that uncertainties regarding monetary and fiscal policies in Brazil are disappearing. The country's credit rating remains at 'BB-' as before.

According to Bloomberg News on the 15th (local time), S&P announced that visibility on the direction of monetary policy has increased, and the risk of reversal of ongoing fiscal policies and economic reforms has decreased.

S&P stated, "Sustained growth in Brazil's Gross Domestic Product (GDP) and the newly emerging fiscal policy framework could result in a lower-than-expected public debt burden, which would support monetary flexibility."

It also said, "Stable policymaking based on broad checks and balances among the executive, legislative, and judicial branches of Brazil, and the progress achieved through this, will reinforce our positive view of the resilience of Brazil's institutional framework."

S&P maintained Brazil's sovereign credit rating at 'BB-,' three notches below investment grade. This rating is comparable to countries such as South Africa, Honduras, and Uzbekistan.

President Luiz In?cio Lula da Silva of Brazil.
Photo by EPA Yonhap News

Fernando Haddad, Brazil's Minister of Finance, said, "(This outlook change) is a sign that Brazil is moving in the right direction," expressing gratitude for the efforts of the legislature and judiciary.

He also stated, "The central bank has not joined these efforts," adding, "I would like to express my appreciation to the monetary authorities as soon as possible," once again calling for a reduction in Brazil's benchmark interest rate.

Currently, Brazil's benchmark interest rate stands at 13.75%, and President Luis In?cio Lula da Silva and the Minister of Finance have been urging the central bank to lower the rate over the past few months.

Meanwhile, in a radio interview on the 15th, President Lula said that Brazil's economy will grow "at least 2%, or possibly more" this year, once again criticizing the central bank's high benchmark interest rate for hindering economic growth.

This content was produced with the assistance of AI translation services.