International credit rating agency Standard and Poor’s on Thursday warned that Brazil’s sovereign credit rating risks another downgrade if the country fails to adopt meaningful pension reform. The warning was made in a statement by S&P Global Ratings Analyst Joydeep Mukherji. “Our objective is to see the current government adopt some form of pension reform sufficient to give the next government, elected in 2018, some breathing space,” said the statement. “If this does not happen, or if there is no reform at all, then the rating could be downgraded.” S&P currently rates Brazil at double-B, or two notches below investment grade. S&P’s current outlook for Brazil’s rating is “negative.” The administration of President Michel Temer has presented a sweeping pension reform plan to Congress, which has been reluctant to consider it. Political risk analysts have said congressional action is even less likely in 2018, a general election year. Finance Minister Henrique Meirelles said this week the government was determined to pass a pension reform bill in some form before the end of this year.
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