S&P promotes Brazil, Uruguay flies

Standard and Poor's rating agency upgraded Brazil's long-term bond rating to BBB-, on par with Peru. The improvement in the classification reflects the positive projections on GDP growth and the decrease in the country's vulnerability to negative external shocks. According to Sebastian Briozzo, an analyst at S&P, “Brazil's diversified economic structure, growing middle class and potential export growth will support GDP growth and foreign liquidity over the next 3 to 5 years.” Recent reforms to limit inflationary pressures show the commitment of Dilma Rousself's government to contain macroeconomic risks. But Brazil is not the only country growing on the South American continent. Private experts consulted by the Uruguayan Central Bank (BCU) said the economy will grow by 5,58% this year. Analysts raised their estimates by 0,25% over their forecasts they had made in April. The 1,6% increase in employment and the decrease in the deficit, which will stabilize at around 1%, are also driving forces. Analysts in Venezuela are also confident. After the declaration of the Central Bank regarding the more than positive results of the first quarter, the international markets decided to reduce the country risk. "Embi will remain stable and Venezuela will be able to repay the markets," said a local analyst, statements that immediately had a positive effect on the perception of the sovereign bonds of the Republic and of PDVSA (the state oil company). Although some analysts still have doubts about the veracity of the data, it seems that investors have accepted the 4,5% GDP growth figure in the first quarter of 2011 for granted. An increase that makes it possible to recover what was lost in the last two years of recession.