Fitch affirms Brazil’s rating at BB with outlook stable

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In a statement, Fitch said that ratings were supported by Brazil’s “large and diverse economy, high per-capita income, and deep domestic markets and a large cash cushion.”

On the other hand, the agency said the ratings are constrained “by weak economic growth potential, relatively low governance scores, high and rising government debt/GDP, and budgetary rigidities,” it said.

Fitch also commented on the first year of President Luiz Inacio Lula da Silva’s third term in office, saying that his administration “has shown broad policy pragmatism.”