Brazil's Fiscal Outlook Will Remain Source Of Uncertainty

(Fitch Connect) Brazil's fiscal deficit will most likely narrow gradually over the coming years, although downside risks are significant. With the next Congress set to be dominated by centrist parties, the spending cap amendment will remain in place and modest fiscal reforms will likely be enacted. However, significant structural adjustments such as pension reforms will face major obstacles to enactment, which could trigger a significant deterioration of investor sentiment over the two years.