Bad news for the seventh largest economy on the planet. Moody's cut Brazil's credit rating by two notches, from Baa3 to Ba2, junk level. The evaluation therefore slips into the "non investment grade" area, while the outlook is still "negative".
In a note, the agency explains that the decision reflects the prospect of a further worsening of the country's debt levels in a context of low growth, with the forecast of a debt/GDP ratio that will exceed 80% within three years.
Moody's also underlines the country's difficult political situation, "which will continue to complicate the authorities' fiscal consolidation efforts and delay structural reforms". The Brazilian rating was also recently downgraded by S&P last week and by Fitch in mid-December.
