The general director of Moody’s in Brazil, Carlos Prates, stated that the credit rating agency does not consider that there is institutional deterioration in the country within the logic of awarding Brazil’s rating or the government’s ability to pay. “We are not yet at a point where we can say that this deterioration is happening,” he said, during a panel participation in the Finance Mais event, organized by state and by Austin Rating.
According to him, the manifestations of the President of the Republic, Jair Bolsonaro, generate noise in the pre-election period without changing the perception regarding the country’s credit risk. He stated that the perception is that the institutions of Brazil – and, in particular, , the Judiciary – are strong.
The executive also stated that the agency does not consider any probability that there will not be presidential elections in the country in 2022. “This is a very extreme scenario, I think we would be moving towards a scenario in which the (credit) score doesn’t even do anymore sense, whatever it may be,” he said. “Definitely, this is something that could affect the grade of Brazil, South America, emerging countries in general, but we do not work with this scenario under any circumstances.”
At the same event, the economist for Brazil at Barclays, Roberto Secemski, said that it is difficult to estimate the impact of the water crisis on the Gross Domestic Product (GDP), but that a reduction between 0.5% and 1.0% would be enough to a “Pibinho” in 2022, with a growth of around 1%. “A lot due not only to water restriction, but the consequence on confidence. The price of energy affects all sectors, especially industry,” he said.
Another participant, Bradesco’s chief economist, Fernando Honorato, ponders that there is a possibility of an increase in GDP next year, associated with a reduction in internal fiscal risks.
The information is from the newspaper The State of São Paulo.
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