May 19, 2017 / 2:38 PM / 4 months ago

BRIEF-Fitch affirms Brazil at 'BB'; outlook negative

May 19 (Reuters) - Fitch on Brazil:

* affirms Brazil at ‘BB’; outlook negative

* says affirmed Brazil’s long-term foreign and local currency issuer default ratings (IDRs) at ‘BB’

* Brazil’s ratings are constrained by structural weaknesses in its public finances, high and rising government debt burden, weak growth prospects,

* issue ratings on Brazil’s senior unsecured foreign and local currency bonds are also affirmed at ‘BB’

* says Brazil’s country ceiling is affirmed at ‘BB+’ and short-term foreign currency and local currency IDRs at ‘B’

* Brazil’s ratings are also constrained by weaker governance indicators, & repeated episodes of political instability & have negative implications for economy

* says forecasts general government deficit to average close to 8% of GDP during 2017-2018, down from close to 9% of gdp in 2016

* Brazil’s economic recovery prospects remain “challenging” after two years of recession

* says negative outlook reflects continued uncertainties around outlook for Brazil’s economic recovery

* high & increasing unemployment rate, corporate and household de-leveraging & lingering fiscal and political uncertainties weighed on economic recovery

* “political environment remains challenging although policy and reform inertia have eased over past few months” Source text for Eikon:

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