05/04 Fitch’s upgrade confirms Brazil’s economic solidity: finance minister

English.news.cn 2011-04-05 12:38:12

RIO DE JANEIRO, April 4 (Xinhua) — Brazilian Finance Minister Guido Mantega said Monday Fitch’s decision to upgrade Brazil’s credit rating reflected the solidity of the country’s economy.

But he also said that a better rating may lead to an increase in investments, which could cause problems as Brazil is currently facing a significant rise in net dollar inflow.

“The more solid the Brazilian economy gets, the more it attracts foreign investments and dollars, which is somewhat of a problem now. But it is better to have excess of dollars than lacking them,” he said.

Earlier on Monday,the credit ratings agency raised its rating on Brazilian investments, giving the nation a BBB rating, up a notch from BBB-, its lowest investment-grade rating.

The U.S. agency said the upgrade reflected the agency’s assessment that the Brazilian economy’s sustainable potential growth rate “has increased from four to five percent, supporting the medium-term fiscal outlook and the continued strengthening of its external liquidity position, which increases the country’s shock-absorption capacity.”

The agency also praised Brazil’s smooth political transition from former President Luiz Inacio Lula da Silva to Dilma Rousseff, saying the consensus on responsible macroeconomic policies remained well-anchored.

Brazil’s GDP grew 7.5 percent last year. Fitch estimated a 4-percent growth for 2011, the same figure projected by Brazilian economists in the latest market survey.

Editor: Wang Guanqun

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About Uy Do

Banking System Analyst, former NTT data Global Marketing Dept Senior Analyst, Banking System Risk Specialist, HR Specialist
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