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Moody's’s has upgraded Brazil’s credit rating from Ba2 to Ba1, placing it at the highest level within the non-investment grade category and just one step below investment grade. The upgrade reflects positive improvements in Brazil's credit metrics, driven by recent economic and fiscal reforms contributing to its credit resilience and economic growth. Analysts at Moody's are optimistic about Brazil's future economic performance, projecting 2.5% growth for this year and anticipating even stronger growth in the medium term. The agency's decision to maintain a positive outlook underscores the belief that steady growth and adherence to the fiscal framework will further enhance institutional credibility and reduce borrowing costs for Brazil.

https://lnkd.in/gUhUfw_w Fitch currently rates Brazil's credit as BB, two notches below investment grade, with a stable outlook.While Moody's this week lifted Brazil's credit rating to only a notch below investment grade status, a vote of confidence in Latin America's largest economy!Putting Brazil in a race to get a grip of its public finances.What do you think?! #Investing

Brazil – Investment Grade within reach => Brazil’s upgrade by Moody’s to Ba1 puts the sovereign rating just 1 notch away from Investment Grade. Moody’s cited solid growth and structural reforms as key reasons behind their decision. Fiscal is still a relatively weak spot though. However, Moody’s kept positive outlook, which means that if Brazil can streamline its fiscal performance, reducing primary deficits and stabilizing its debt/GDP ratio, there will be further rating upgrades. So, Investment Grade is no longer Sci-Fi. => Brazil’s rating upgrade by Moody’s is just one of many positive rating actions this year – the share of upgrades keeps rising (see chart below), hopefully reflecting better fundamentals and institutions in EM.

Kenya's Moodys soverign credit rating downgrade to Caa1 with negative outlook after rejectuon of Finance Bill 2024 portends liquidity challenges & high borrowing costs until till Kenya returns to the fiscal consolidation path via tax revenues growth; expenditure rationalisation and GDP growth. Crowding out of critical social spending and Capex development expenditures expected as recurrent spend and both LCY and FCY debt repayment get prioritised. Risk premium for FCY deficit financing will raise external borrowing for commericial and even concessional bilateral and multilateral borrowings even as Kenya waits for US FED to cut its Federal Funds Rate by 25bps to 5.1% if core inflation falls from 3.4% to the low and stable 2% target and further 100bps in both 2025 and 2026 to deliver FFR terminal rates of 4.1% and 3.1% respectively. LCY deficit financing costs will rise from high GOK risk premium thereby elevating overall domestic interest rates even as investors shift bias to short term GOK securities. https://lnkd.in/d8rQUf5w

📊#ChartOfTheWeek: Uncertainty looms Brazil’s five-year credit default swap bonds (often used as a proxy for sovereign risk) has risen by nearly 30 percent between January 1 and July 2, according to data analyzed by consultancy Neo Investimentos. While risk perception has increased in recent months for many emerging economies (due to the prospects of high interest rates in the U.S. for longer), the jump in Brazil’s country risk was steeper than in other countries. ♟️State of play: Many analysts believe that has happened because of the government’s increasingly tough budgetary challenges (the zero-deficit goal is proving more difficult than anticipated) and deteriorating relations with Congress. 🔗Read more in our full #BrazilWeekly newsletter here 👇 https://lnkd.in/drFnmWAy #CreditBonds #Economy #RiskManagement

Great to see multilateral "Key Considerations for Open Finance" released by CGAP, International Monetary Fund, Bank for International Settlements – BIS, The World Bank, United Nations Secretary-General's Special Advocate for Financial Health, an important initiative toward increasing use and benefit of financial accounts and diversifying availability of digital financial services products to meet broader needs -- goals that align with our Atlantic Council #Geoeconomics Center research toward a #financialinclusion agenda for the #globalmajority. New Open Finance Guidelines Aim to Spur Financial Inclusion (imf.org) The framework is organized around 10 principal elements: objectives, process leadership, governance, regulation, consumer and data protection, oversight and supervision, participation, technical infrastructure and architecture, and pricing. Full document -> Key Considerations for Open Finance | CGAP Research & Publications https://lnkd.in/ekZij6Xw Atlantic Council brief "Toward a financial inclusion agenda for the global majority" -> https://lnkd.in/dvfiu2Ry #digitalfinance #openfinance #futureofmoney #IFIs Sophia Busch Alisha Chhangani Josh Lipsky Ananya Kumar Tala Shivani Siroya

Moody's Ratings has completed a periodic review of the ratings of Romania and other ratings that are associated with this issuer. Romania's Baa3 ratings reflect the economy's strong growth potential, supported by large European Union (EU, Aaa stable) funds and foreign direct investment (FDI) inflows. High economic strength is balanced by relatively weaker institutions and governance strength and high fiscal and current account deficits, although the latter is mainly funded by stable sources. Romania's government debt burden and debt affordability metrics are stronger than those of rating peers, but both are set to deteriorate gradually in coming years due to high fiscal deficits and rising interest payments. Moody's expects the Romanian economy to continue to strengthen from a year of comparatively weak growth of 2.1% in 2023, with real GDP growing 3.0% in 2024 and 3.5% in 2025, backed by strong consumption as well as public and private investment. However, the government continues to struggle to bring down the elevated fiscal and current account deficits. Moody's projects a fiscal deficit of 5.7% of GDP in 2024 only marginally improved from 2023, while the current account deficit will only marginally improve to 6.6% of GDP from 7.0% in 2023. Full article here (you need to create a free account for viewing): https://lnkd.in/ga5pW4Sg

🔮 Better rate outlook Good morning! Today, Moody’s more bullish on Brazil. How unions have lost ground. And Lula’s electoral blunder. Moody’s on Wednesday reaffirmed Brazil’s long-term issuer and senior unsecured bond ratings at Ba2, two notches below investment grade. Meanwhile, the rating agency improved Brazil’s outlook from stable to positive. 💡Why it matters. While not a rating improvement per se, Moody’s better outlook for the Brazilian economy reaffirms a certain optimism about the country and Finance Minister Fernando Haddad. Last year, both S&P and Fitch upgraded Brazil’s credit rating. 🔗Read more in our full newsletter by Gustavo Ribeiro here 👇 https://lnkd.in/dWemHSxB #Brazil #Economy #Ratings #Optimism

🇬🇷 Moody's changed the outlook on Greece to positive from stable and affirmed the country's rating at Ba1. Moody's noted that the outlook change to positive reflects an increased likelihood of sustained strengthening in banking sector health, which reduces contingent liability risks to the government. In addition, with the possibility of economic growth and fiscal performance exceeding the Agency's expectations, Greece's fiscal strength could improve faster than currently expected. The affirmation of 🇬🇷 Greece's Ba1 rating reflects the significant improvements in the past years regarding structural reform implementation and fiscal consolidation balanced against continued challenges in areas such as improving judicial efficiency, reducing macroeconomic imbalances, and the very high government debt burden. #greece #moody's #ratingaction #positiveoutlook https://lnkd.in/db666yf3

S&P Global affirms Liechtenstein's AAA rating and a stable outlook. The stable outlook reflects the strong budgetary position and extensive financial buffers. Along with Liechtenstein's high policy effectiveness and prudent regulatory framework, these factors underscore the Principality's creditworthiness and protect the country from global economic and financial uncertainties.