Fitch dealt Brazil's credit rating a one-step cut on Thursday to just above a junk rating, saying the government faces increased fiscal pressures as the economy contracts.
Fitch lowered the rating to BBB- from BBB, putting the country's bonds one notch above "speculative" or junk level, and appended an "outlook negative" warning that a further downgrade could be in store.
"The rating downgrade reflects Brazil's rising government debt burden, increased challenges to fiscal consolidation and a worsening economic growth backdrop," the rating agency said.
"The difficult political environment is hampering progress on the government's legislative agenda and creating a negative feedback loop for the broader economy."
Fitch said the recession is having a greater-than-expected impact on government revenues.
And it said "considerable uncertainty" remains over the government's retrenchment efforts, and predicted the government deficit will deteriorate to nine percent of gross domestic product this year and be above six percent of GDP next year.
It said the overall debt burden of Latin America's largest economy will then rise to about 70 percent of GDP next year, and continue to rise in 2017.
Earlier this month the International Monetary Fund said that Brazil's economy will shrink about three percent this year and another one percent next year.
GMT 05:32 2017 Friday ,15 December
Latest Monsanto GMO seeds raises worries of monopolyGMT 12:13 2017 Thursday ,14 December
Dutch to join Austria to fight German road toll planGMT 12:58 2017 Tuesday ,05 December
Venezuela creating digital currency amid financing crisisGMT 09:28 2017 Monday ,04 December
Venezuela to create digital currency amid financing crisisGMT 09:38 2017 Sunday ,03 December
Rajoy pledges economic boost if 'normalcy' returns to CataloniaGMT 13:31 2017 Tuesday ,28 November
Greenpeace slams Indonesia palm oil industry on deforestationGMT 15:29 2017 Monday ,30 October
S. Korea prosecutors seek 10 years' jail for Lotte bossGMT 03:27 2017 Friday ,20 October
Protests on the wane against Macron's labour reformsMaintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2023 ©
Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2023 ©