Brazil tries to avert credit downgrade as pension reform doubts grow
Brazil’s Finance Minister Henrique Meirelles will speak to major credit rating agencies on Thursday as the government scrambles to avoid a sovereign debt downgrade due to growing doubts that its proposed pension reform can rein in surging public debt.
A vote on the unpopular bill to overhaul the social security system, seen as vital to closing the fiscal deficit, has been delayed to 2018 after failing to muster support in Congress. Lawmakers have warned that handling the hot-button issue ahead of next year’s elections would reduce the chances of approval.
Meirelles said in a radio interview he will tell rating agencies the delay until February does not mean pension reform will not be approved. He told Radio Estadão it would be “reasonable” for the agencies to wait until the bill is voted on before deciding on a potential downgrade.
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