S&P expects Brazil to miss fiscal target in 2009

Wed Mar 4, 2009 5:48pm EST
NEW YORK, March 4 (Reuters) - Brazil will likely miss its primary fiscal target in 2009 as the government boosts investment to fight a global economic downturn despite an expected fall in revenues, Standard & Poor's forecast on Wednesday.
The ratings agency added, however, that a small deterioration in Brazil's fiscal indicators will not hurt its recently-obtained investment grade rating.
"In this environment, we expect fiscal deterioration," S&P analyst Lisa Schineller told investors on a conference call.
"A little bit of slippage is not something that is going to turn a credit profile, especially if you are seeing that within a context of a broader policy commitment, which we believe Brazil has," she added.
S&P is expecting Brazil's primary surplus to be closer to 3.3 percent of GDP this year, below the 3.8 percent target, Schineller said. The final number will depend on how the government takes into account specific infrastructure investment that can be discounted from the fiscal target, she said.
A change in this year's fiscal target was not ruled out by Finance Minister Guido Mantega on Wednesday. In Brasilia, the minister said the government will announce its final fiscal goal for 2009 by March 20. (Reporting by Walter Brandimarte; Editing by Diane Craft)