75 percent of Brazilian companies in risk of negative outlook

The Standard & Poor`s (S&P) has listed around 75 per cent of Brazilian companies under special scrutiny with its CreditWatch programme. while 65 per cent of them have a negative perspective, reports Xinhua.

According to the daily O Estado de Sao Paulo on Friday, while S&P has given a negative outlook to most Brazilian companies, the number of downgrades has now diminished after reaching a record high earlier this year.

Brazil is the Latin American country with the most negative outlooks for S&P, followed by Colombia (63 per cent of companies), Peru (18 per cent) and Chile (15 companies).

If companies are put under CreditWatch, it means they are thought to be in risk of a negative outlook.

According to S&P managing director, Eduardo Uribe, Brazil is seeing an improvement in private sector trust in the national economy, which could trigger a rise in investment, but it is also facing rising unemployment and ongoing poor sales in the retail sector.

The volatility risk of the Brazilian currency and weaker than expected economic growth could continue to pose risks for the credit rating of Brazilian agencies, Uribe added.

However, S&P predicted that Brazil would see GDP growth of 1.5 per cent in 2017, after two years of contraction.