The government reacted with dissonance to the news of Standard & Poor’s downgrade of Brazil’s investment grade rating. The Ministry of Finance lamented the rating agency’s decision and is trying to find alternatives to counteract the negative impact of the announcement.
In an interview with TV Globo, Finance Minister Joaquim Levy said that the S&P grade is an evaluation of “whether we are looking at the situation with enough seriousness.” And he emphasized the need for cuts. “There is no point in asking the population to write a check to the government. You have to look for places to make cuts. You can always make cuts.”
The Ministry of Planning released a history of the ratings and highlighted that, “After all, Brazil has been in a worse situation,” a sly reference to the PSDB governments. The head of the Planning Ministry, Nelson Barbosa, commented that it is only an evaluation by a risk agency, which is important. “We are in a transition phase, one of economic difficulties. I am sure that this evaluation will be reversed as soon as things improve.”
This Thursday will be driven by debates, in Congress and the press, on how the country should react to the downgrade, followed by the reactions of the business sector and the markets to the event.
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