Brazil Suffers First Downgrade in Decade as Deficits Boost Debt

Brazil’s credit rating was cut by Standard & Poor’s, which said sluggish economic growth and President Dilma Rousseff’s expansionary fiscal policies are fueling an increase in debt levels.

S&P downgraded the country one step yesterday to BBB-, its lowest investment-grade rating, with a stable outlook. The new ranking is in line with Spain and the Philippines, one level below Russia and two levels below Mexico. Brazilian bond yields have have climbed 1.03 percentage points in the past year to 5.13 percent, according to JPMorgan Chase & Co.