In a statement issued on Wednesday (26/11), risk rating agency Moody’s said that it maintained Brazil’s sovereign credit rating at Ba1, with a “stable” outlook, that is, just one level below the so-called investment grade.
The last credit rating change was in October 2024, when Brazil moved up a notch and became considered a good payer. In May this year, Moody’s maintained its position, but changed the rating perspective (rating in terminology) from positive to stable.
In the report, Moody’s highlighted the “resilience” of the Brazilian economy in the face of the tariffs imposed by US President Donald Trump. The post also highlighted the decline of Republicans, who on November 20 eliminated the additional tax on several Brazilian agricultural products.
The agency notes that the impact of US tariffs on the Brazilian economy was limited. Moody’s says a large and diversified economy, with limited exposure to external shocks, favors Brazil.
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Negative points
In the report, the agency lists some points that need improvement in order for Brazil to obtain a higher credit rating, and reach investment grade – a good payment stamp given by agencies, which guarantees investors a lower risk of default.
Among the topics of interest are political polarization and the relationship between the federal government and the National Congress.
Moody’s says: “Structural economic reforms implemented by successive administrations in recent years have boosted investment and growth prospects. However, political polarization is an impediment to policy making, limiting fiscal adjustment efforts.”
The agency says macroeconomic reforms that improve the fiscal framework have also contributed to “reducing the vulnerability of Brazil’s fiscal position to tightening cycles.”
Finally, Moody’s stated that the interest rate remains an “obstacle” to the rating improvement. The central bank’s Monetary Policy Committee maintained the base interest rate at 15% annually, the highest level in nearly two decades.