Brazil was downgraded by Fitch Ratings, which kept a negative outlook on the nation’s debt citing a deeper-than-anticipated recession and political instability.
Fitch cut the rating by one level to BB, in line with grades from S&P Global Ratings and Moody’s Investors Service. Fitch had last downgraded Brazil in December. The rating is in line with those of Croatia, Bolivia, Paraguay and Guatemala.
Brazil is facing its worst recession in a century amid a widening corruption probe that’s prevented Congress from approving measures to revive growth and shore up the budget. The failure to stabilize the outlook for public finances and political gridlock are hindering improvements in confidence, Fitch said. While a political change if President Dilma Rousseff is removed from office could usher in economic adjustments and reforms, changes will be hard to implement amid rising unemployment and uncertainty surrounding the stability of the governing coalition, according to the ratings company.