S&P: Brazil view to positive

Standard & Poor's said it revised the outlook on its long-term foreign-currency sovereign credit rating on the Federative Republic of Brazil to positive from stable.

The outlook on the long-term local-currency rating remains stable.

S&P said it affirmed the BBB-/A-3 long- and short-term foreign-currency ratings and its BBB+/A-2 long- and short-term local-currency ratings on Brazil.

The positive outlook reflects Brazil's strengthening prospects for steady, long-term GDP growth, along with modest current account and fiscal deficits that should gradually reduce the country's vulnerability to negative external shocks, S&P said.

Brazil's diverse economic structure, expanding middle class and the potential for higher exports should sustain both GDP growth and external liquidity in the next three to five years, the agency said.

Political consensus in favor of cautious fiscal and monetary policies likely would contain the risk of economic dislocation that could result from potential shocks, S&P said.

Brazil's limited fiscal flexibility and high domestic interest rates will continue to require that the government remain strongly committed to a prudent economic approach, the agency added.

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