© Flickr/ Gideon Benari
© Flickr/ Gideon Benari

Fitch Ratings downgraded Brazil’s ratings on Wednesday, with the long-term foreign and local currency Issuer Default Ratings (IDRs) falling to ‘BB+’ from ‘BBB-‘, as the negative outlook for the country persists.

WASHINGTON (Sputnik) — Fitch said in a press release:

“Brazil’s downgrade reflects the economy’s deeper recession than previously anticipated, continued adverse fiscal developments and the increased political uncertainty that could further undermine the government’s capacity to effectively implement fiscal measures to stabilize the growing debt burden.”

Fitch explained that consumption in Brazil has been suffering from increased unemployment, constrained credit, high inflation and depressed confidence. Moreover, investment suffered from political uncertainties, problems in the construction sector and corruption.

Brazil, according to Fitch, has experienced pressure from the external environment, as international financial conditions have tightened with the slide of commodity prices and the slowdown of China’s economy.

“Fitch now forecasts growth of —3.7% and —2.5% in 2015 and 2016, respectively with risks skewed mainly to the downside,” the press release said.

Fitch downgraded Brazil’s ratings in October 2015, citing as reasons the rising government debt, challenges to fiscal consolidation and worsening economic growth.