US EditionMoody's lowers Brazil outlook to stable
- On June 1, 2025, Moody’s Ratings revised Brazil’s outlook to stable from its previous positive stance, while maintaining the Ba1 rating just below investment grade.
- The downgrade follows Moody's reassessment of Brazil's limited fiscal flexibility amid rising debt and cooling economic growth after an upgrade in October 2024.
- Brazil's budget locks over 90% of spending into mandatory costs like pensions and public salaries, while GDP growth slows to 2% in 2025 and private investment falls.
- Moody's notes that Brazil's public debt is forecasted to reach 92% of GDP, with the benchmark interest rate at 14.75%, resulting in interest expenses accounting for 21% of the government's total revenue, all of which pose significant fiscal challenges.
- The outlook suggests that without structural reforms, Brazil faces continued funding challenges, while inflation remains above target at 5.53%, squeezing households and businesses.
19 Articles
19 Articles
Moody’s Cuts Brazil Outlook, Delivering Fiscal Warning to Lula
Moody’s Ratings lowered Brazil’s credit outlook to stable from positive, delivering a reproof to President Luiz Inacio Lula da Silva’s government at a time when it is under increasing pressure to shore up the country’s fiscal situation.
Moody's lowers Brazil outlook to stable
Moody's Ratings on Friday changed its outlook on Brazil to stable from positive while affirming its Ba1 ratings, citing "slower-than-expected progress in addressing spending rigidity and building credibility around fiscal policy."
Brazil’s Fiscal Credibility Tested as Moody’s Downgrades Outlook Amid Debt Surge
Moody’s Ratings downgraded Brazil’s credit outlook from “positive” to “stable” on Friday, signaling fading confidence in President Luiz Inácio Lula da Silva’s ability to stabilize public finances. The agency affirmed Brazil’s Ba1 rating—one notch below investment grade—but warned that rising debt costs, stubborn inflation, and rigid spending threaten long-term growth. Brazil’s public debt is projected […]
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