Ukrianian court puts on hold lawsuit against ban on Russian social networksWorld May 28, 6:10
Russia’s Lasitskene wins high jump in Diamond League event in Eugene, USSport May 28, 4:59
Havana Airport gets Russian-made air traffic control systemsWorld May 28, 4:16
Guests of FIFA 2018 World Cup sure to get warm welcome in Russia — LavrovSport May 28, 2:25
Kantemir Balagov’s "Closeness" gets Cannes Festival’s International Critics’ PrizeSociety & Culture May 28, 1:03
Anti-church laws in Ukraine may cause religious strife — Ukrainian Orthodox ChurchWorld May 28, 0:22
Russia’s national football team absolutely clear of doping — doctorSport May 28, 0:14
Russian cyclist Zakarin finishes second in Giro d’Italia Stage 20Sport May 27, 22:27
Putin, Erdogan agree to develop coordination of efforts for settlement in SyriaRussian Politics & Diplomacy May 27, 19:29
NEW YORK, August 12. /TASS/. Moody’s Investors Service has cut the government bond rating of Brazil by one notch to Baa3 from Baa2, but the agency altered the outlook on the rating from negative to stable, the international rating agency said in its statement.
The rating cut to Baa3, the lowest investment-grade level under Moody’s classification, follows the country’s recently weak economic achievements, the agency said.
"Weaker-than expected economic performance, the related upward trend in government expenditures and lack of political consensus on fiscal reforms will prevent the authorities from achieving primary surpluses high enough to arrest and reverse the rising debt trend this year and next, and challenge their ability to do so thereafter," the statement said.
According to the international rating agency’s forecast, Brazil’s economic "growth has been even weaker than Moody's expected a year ago, and will remain so."
"Fiscal and monetary policy tightening, along with weak consumption and investment spending, will negatively impact economic growth in 2015-16, with the expectation of a recession in 2015, a stagnant economy next year, and a gradual post-2016 recovery with GDP growth reporting annual rates of about 2% in 2017-18," the statement said.
The agency also said that its premium driver of the rationale for the downgrade: "Weak economic growth, increased government spending and a lack of political consensus will limit the authorities' ability to arrest and reverse deficit and debt trends."
Brazil is currently in full swing preparations for hosting one of the world’s most important sports events, which requires weighty financial investments. Rio de Janeiro is hosting the 2016 Summer Olympic Games on August 5-21. Last year, Brazil hosted the 2014 FIFA World Cup.
Moody’s also said in its statement that "The rating could go up, or the outlook be revised to positive, should Moody's conclude that Brazil's economic and fiscal prospects are likely to stabilize and ultimately improve faster or with greater assurance than currently expected. Such an outcome would likely be associated with fiscal reforms that reduce structural budgetary rigidities derived from revenue earmarking and mandatory growth in various spending categories."
In its review for further downgrade, the agency said that "The rating could come under additional pressure if government debt metrics were to deteriorate further and faster than Moody's expects, and if the rating agency were to conclude that Brazil was unlikely to achieve the growth and fiscal consolidation needed to ensure fiscal sustainability over the medium term."