Today, we talk about how Jair Bolsonaro struggles to fit social policies within the federal budget — and Brazil could have its debt rating downgraded. Meat kings JBS add to their list of scandals. Bolsonaro ally caught short during Federal Police corruption operation.
Bolsonaro torn between fiscal cap and need for social policies
Samar Maziad, a vice president and senior analyst for Brazil at ratings agency Moody’s, said on Wednesday that Brazil’s sovereign debt could be downgraded further into junk territory unless the government managed to advance its agenda of reforms this year or, at the latest, early in 2021. “If the support for reforms dwindle, it will have a negative impact on our outlook [for the country],” said Ms. Maziad during an event.
- Moody’s currently gives Brazil a Ba2 rating, two tiers below investment grade, with a “stable” outlook.
Why it matters. The path of austerity is by no means an obvious choice. With record-high unemployment rates and an uncertain recovery from the pandemic crisis — which no one knows how long will last — the government has been faced with the challenge of creating a new cash-transfer program that is bigger than Bolsa Família.
- There is also...