LatinNews Daily - 15 June 2023

* The international credit ratings agency S&P has updated its assessment for Brazil, revising its outlook on long-term global scale ratings from ‘stable’ to ‘positive’. It affirmed its scores of ‘BB-/B’ for Brazil’s long- and short-term sovereign credit ratings. S&P attributed the positive outlook on Brazil to continued GDP growth and legislative initiatives such as the government’s proposed framework for fiscal discipline rules and a tax reform bill currently being reviewed in congress. The credit ratings agency also raised its 2023 growth forecast for Brazil from 0.7% to 1.7% and praised the growth prospects of sectors such as agriculture, which it said could “more than compensate for a very restrictive monetary stance that has slowed consumption and contracted investment thus far in 2023”. S&P expressed optimism that lower inflation and easing monetary policy will likely support growth prospects, but warned that Brazil’s “complex institutional arrangements” could impede fast policy implementation, highlighting that the centre-left administration will need to “work pragmatically” with a divided, but largely centrist, congress to implement its fiscal and economic plans.