Just 3 months after Brazilian President Dilma Rousseff appointed Joaquim Levy as Brazil’s new finance minister, analysts wondered if Brazil was eventually becoming another economy on the brink as both economic and political environments were deteriorating quickly. Russia’s debt had simultaneously been downgraded by rating agencies as “junk”. Despite the efforts led by fiscal conservative Levy, Brazil has failed in its priority to not follow Russia’s footsteps.
Indeed, Brazil has lost its investment-grade credit rating awarded in April 2008 following a downgrade by S&P on September 9, 2015 to “junk” status. With a BB-plus and negative outlook rating, Brazil is now likely to undergo an even harsher recession after its GPD plunged by 1.9% in Q2 2015. Then there is the mounting political crisis with a growing crowd who demands Rousseff’s impeachment over corruption allegations. Bad time for the BRICS.