Day: September 9, 2020

Moody’s: breach of spending cap rule is a material risk

The Brazilian government’s spending cap rule faces a “material risk” of being breached from next year onward due to rising political risk and pressure to maintain welfare spending, ratings agency Moody’s said. Breaching the spending cap would push government debt even higher and threaten Brazil’s credit profile. Moody’s expects government spending to drop to about 39% of GDP in 2021 from 42% this year, which will support the fiscal accounts, although this would still be higher than the 38% of GDP pre-pandemic last year.

Brazil’s Central Bank is looking to launch digital currency set by 2022

The race toward central bank digital currencies (CBDCs) is tightening, with Brazil reportedly looking to launch one by 2022 in a bid to help digitize payments. Even though it’s not a winner-take-all competition, central banks first out of the gate might prove instructive to those who follow. Roberto Campos Neto, president of Brazil’s central bank, said the country’s new digital currency will work with its new instant-payments system.

Brazil ranks 62nd in Global Innovation Index

In this year’s Global Innovation Index, compiled by the World Intellectual Property Organization (WIPO) in partnership with Cornell University and Insead, Brazil appears in the 62nd position. This result is an improvement compared to 2019, when the country ranked 66th. However, Brazil s still lagging behind other Latin American nations such as Mexico, Chile and Costa Rica.