Brazil’s Economic Outperformance Has Not Translated into Strong Public Finances: Fitch

Brazil’s recent better-than-expected economic performance has not translated into stronger public finances, international ratings agency Fitch said on Thursday, predicting that the country’s gross debt-to-GDP ratio is expected to rise to 77.8% this year, up from 74.4% last year, and reach 83.9% by 2026.

Since Brazilian President Lula began a new term last year, the three major rating agencies Fitch, Standard & Poor’s and Moody’s have all upgraded Brazil’s sovereign credit rating to BB. However, an uncertain outlook due to a sharp drop in commodity prices and the loose fiscal policy has constrained further rises in Brazil’s rating.