Moody’s Investors Service on Wednesday became the third of the big-three credit rating agencies to downgrade Brazil from investment grade to speculative status. Standard and Poor’s and Fitch downgraded Brazil at the end of last year. Moody’s cut Brazil’s rating from Baa3 to Ba2, with a negative outlook. Moody’s joined the other agencies in citing Brazil’s deteriorating public accounts, saying the country’s debt-to-GDP ratio was likely to top 80% at some point within the next three years. Moody’s also pointed to political uncertainties, persistently high inflation and a long period of negative growth as reasons for the downgrade. The Moody’s decision had been widely expected.
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