Brazil's sovereign debt is one step away from junk after Standard & Poor's downgraded Latin America's powerhouse economy, prompting a furious reaction from the Brazilian treasury.
The rating agency cut Brazil's debt one notch to BBB-, citing "fiscal slippage", bad economic management, and one-off tricks that flattered the public accounts. It warned of a widening trade deficit and weak growth for years to come.
Marcelo Carvalho from BNP Paribas said the former darling of the BRICs quartet is staring "down the barrel of a recession", a viewed echoed on Tuesday by Mark Mobius from Templeton Emerging Markets.
