Fitch comments on Brazil fiscal program, will be supportive of the BBB rating
- Fitch: A tightening of fiscal policy would enhance the credibility of Brazil's overall macroeconomic policy framework and help in placing the government's debt dynamics on stronger footing, according to Fitch Ratings. This would be supportive of Brazil's 'BBB' sovereign rating.
- Fiscal tightening could help improve investor confidence and benefit the outlook for inflation as well, thereby supporting the sovereign's credit profile. Inflation has remained elevated despite a slow economic recovery and a monetary tightening of 325 bps since last year. IPCA inflation reached close to 6% in December 2013, which is above the midpoint of the 4.5%+/-2% inflation target
- Fitch last affirmed Brazil's foreign and local currency IDRs of 'BBB', with a Stable Outlook, in July 2013.
- Fiscal tightening could help improve investor confidence and benefit the outlook for inflation as well, thereby supporting the sovereign's credit profile. Inflation has remained elevated despite a slow economic recovery and a monetary tightening of 325 bps since last year. IPCA inflation reached close to 6% in December 2013, which is above the midpoint of the 4.5%+/-2% inflation target
- Fitch last affirmed Brazil's foreign and local currency IDRs of 'BBB', with a Stable Outlook, in July 2013.