Archive for September 22nd, 2009

Brazil gets foreign investment boost

September 22nd, 2009

Brazil’s hopes of luring greater levels of foreign investment received a shot in the arm on Tuesday, when investment ratings agency Moody’s raised the country’s government-backed bonds to investment grade.

Though Moody’s is the last ratings agency to do so, it is not ruling out a further upgrade to Brazil’s so-called ’sovereign debt’.

“Evidence of strong economic and financial resilience…can be seen in the modest and short-lived contraction in GDP, minimal weakening in the country’s international reserve position, moderate deterioration in the government debt indicators and lack of financial stress in the banking system,” Mauro Leos, Moody’s regional credit officer for Latin America said in a statement.

Moody’s is also reviewing Brazil’s foreign and local currency credit ratings for possible upgrade, citing the country’s resilience to the shocks from the global financial and economic crises.

It’s more good news for Brazil’s government, after the country pulled out of recession in the second quarter from April to June by posting 1.9% growth. The technical definition of a recession is when the total of all the goods and services in an economy (GDP) has shrunk for two consecutive quarters.

Brazilian President Luiz Inácio Lula da Silva, who was criticised by some at the start of the global crisis for saying the downturn would prove to be a ‘little wave’ not a tsunami was last week lauded by French newspaper Le Monde for his insight.

Opponents have called it a lucky guess.

Economy, News