Fitch Ratings on Friday downgraded Brazil’s sovereign credit rating to double-B-minus from double-B, citing increased pressure on government accounts. The decision came days after the administration of Brazilian President Michel Temer decided to abandon plans for an early vote on a pension reform bill. The bill would have gradually reduced government pension costs. Fitch’s new rating puts Brazil three notches below investment grade, the same level as Standard and Poor’s. Moody’s Investors Service still rates Brazil two notches below investment grade. In ordering the downgrade, Fitch said in a statement, “Brazil’s downgrade reflects its persistent and large fiscal deficits, a high and growing government debt bur den and the failure to legislate reforms that would improve the structural performance of public finances.” Fitch added that, “The political backdrop continues to remain challenging, and the 2018 election cycle could introduce additional uncertainty.”
Link to Fitch Ratings release
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