Fiscal Outlook: A Bump In The Road

BMI View: A widening nominal public sector deficit and growing debt load in 2009 should represent little more than a bump in the road, although we caution that the Brazilian authorities must maintain fiscal credibility in order to keep foreign creditors and the ratings agencies on side. Should a favourable election outcome next year speed up the pace of reform, we believe that Brazi'sl next step up the investment grade ladder would be only a matter of time.

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