Moody’s, the prestigious credit rating agency, has elevated Brazil’s sovereign debt rating from Ba2 to Ba1, moving the country one step closer to achieving the coveted “investment grade” status. The announcement came after the São Paulo Stock Exchange closed on Tuesday.
The upgrade reflects the success of President Luiz Inácio Lula da Silva’s economic plan, with Moody’s praising Brazil’s economic management, including the new fiscal framework, tax collection efforts, and public debt management. The agency also commended the recent tax reform initiative.
Attributing the credit improvement to robust economic growth and fiscal reforms, Moody’s emphasized the government’s commitment to fiscal targets and debt stabilization relative to GDP. The tax reform, the first successful overhaul since 1985, is expected to enhance the business environment and long-term growth potential.
Furthermore, Moody’s highlighted Brazil’s energy transition agenda, acknowledging its potential to attract private investment and reduce vulnerability to climate change in alignment with global sustainability trends.
With expectations of broad-based growth in the years ahead driven by strong domestic demand, Brazil’s economic trajectory looks promising according to Moody’s assessment.