Brazil Weaknesses Not Enough to Cost Moody’s Investment Grade

The deterioration in Brazil’s economic and political outlook isn’t enough to strip the country of its investment grade, Moody’s Investors Service senior analyst Mauro Leos said.

“There are clear weaknesses facing Brazil, but they’re not as bad as those that we saw when we downgraded other countries,” Leos said Tuesday at a Council of the Americas conference in New York.

Moody’s, which rates the country at the lowest investment grade, expects the economic contraction in Brazil to weaken fiscal accounts and increase debt ratios this year and next. The recession and a corruption investigation at the state-controlled oil company have sapped investor confidence in President Dilma Rousseff’s ability to shore up the country’s finances. The deterioration has sent the currency to a record low and prompted Standard & Poor’s to downgrade the country to junk on Sept. 9 with a negative outlook.

Read More