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Apr | 2017 | N° 38
Moody's revises Brazil's credit rating outlook from negative to stable03/16/2017 | 13h13
Foreign investors are now predicting positive improvements to the Brazilian economy. Ratings agency Moody's, which assesses how safe a given destination is for investment, has indicated that it intends to increase Brazil's rating outlook from negative to stable. This could mean more investments, projects and jobs in the country.
The agency explained through a statement that the is the result of improved macroeconomic conditions, and further reported that it expects economic growth to recover in 2017 and inflation to decrease faster than expected in the near future.
That approval by Congress of the reforms submitted by the government has had a fundamental role in this change of outlook. Moody's highlighted that a more positive environment for these changes emerged last year, which also shows that the country's institutions have also improved their effectiveness.
Importance of reforms
"The government has already obtained approval of an important constitutional amendment that limits public spending growth to the variation of the previous year's inflation for the next 20 years," the agency's statement said, adding that “Congress is also debating an equally important pension reform”.
Moody's also explained that Brazil's rating may increase if structural reforms lead to stronger growth for the country, for which (still according to the agency) continuity of current policies is a crucial factor.