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Brazil hit with negative outlook by S&P

world Updated: Jun 07, 2013 14:44 IST

AFP
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Standard and Poor's revised its outlook for emerging powerhouse Brazil to negative on Friday due to slowing economic growth and overburdened government finances.


With a negative outlook, the ratings agency signals that a downgrade to Brazil's sovereign debt rating could take place over the next two years.

Slow growth and unchanged government spending "risk weakening Brazil's financial profile and could, absent corrective measures, result in weaker fiscal performance and an increase in the government's debt burden," the agency said in a statement.

Falling exports and sluggish private investment are hurting Brazil's growth, S&P said.

"Brazil is likely to suffer its third year of modest economic growth, with GDP likely to expand only 2.5% in 2013, after growing 2.7% in 2011 and 0.9% in 2012," said Standard & Poor's credit analyst Sebastian Briozzo.