Off the wire
• Central bank drains 220 bln yuan from market  • Bill allowing demonstrators to protest without permit sought in Myanmar parliament  • Tokyo stocks lose ground in morning on concerns for U.S. economy ahead of jobs data  • 1st LD: Debris parts from missing helicopter found in Malaysia's Sawarak state  • Chile begins training towards Copa America with friendly matches  • Roundup: Cuba eyes Chinese tourists  • Colombia's large delegation to participate at IAAF World Race Walking Cup in Italy  • Urgent: Debris parts of missing helicopter found in Malaysia's Sawarak state  • "Starving" cancer cells a key to new tumor treatments: Aussie researchers  • Toyota restarts all Kumamoto quake-affected assembly lines  
You are here: 　 Home

Fitch lowers Brazil's credit rating due to political gridlock

Xinhua, May 6, 2016 Adjust font size:

Fitch Ratings downgraded Brazil's sovereign credit rating on Thursday from BB+ to BB and maintained a negative outlook, citing a highly challenging political environment in the Latin American biggest economy.

The rating agency explained that the cut reflected a deeper-than-expected economic contraction, the government's failure to restore public finances and continued uncertainty of the country's political future.

It was the second time that Fitch cut Brazil's credit rating in less than six months. At the end of 2015, the agency lowered Brazil's rating from BBB- to BB+, stripping the country of its investment grade. The other two credit rating agencies, Standard & Poor's and Moody's, have also stripped Brazil of its investment grade.

"Short-term growth perspectives have continued to weaken despite the lowering of Brazil to BB+ in December 2015. The agency now predicts growth of -3.8 percent in 2016 and 0.5 percent for 2017, down from predictions in December of -2.5 percent and 1.2 percent, respectively," Fitch said.

Brazil is facing its worst economic recession in a century as a widening corruption investigation has prevented Congress from approving measures to revive growth. Endi