Good Fiscal Results Warrant Forecast Revision

August 2007 | Market Strategy

BMI View:We remain upbeat in regard to Brazil's fiscal outlook, as lower levels of spending and higher revenues improve the country's fiscal position. Given that the finance ministry has targeted a balanced nominal fiscal outturn by 2009, we have upwardly revised our forecasts - although at a small deficit of 0.5% of GDP in 2009, we are slightly less ambitious than the government. Such an improvement is likely to get noticed by rating agencies, which could help Brazil's drive to investment grade status in the next year or so.

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