The Russian ruble is near its ten-year low, the Chinese economy is having its weakest first quarter in five years, and Brazil has had its long-term foreign currency sovereign credit rating downgraded to BBB- from BBB+ by Standard & Poor’s:
The downgrade comes after growing criticism over Brazil’s handling of its fiscal accounts and its reliance on one-off items and “creative accounting” to meet official fiscal targets.
The agency also cast further doubt over the government’s promises last month to cut $18.5bn in public spending to meet its current target.“It will be difficult to achieve the formal 1.9 per cent of GDP primary surplus target without recourse to “one-off adjustments,” in our view, given low growth and the continuation of some tax exemptions,” S&P said.The agency pointed to the country’s recent disappointing economic performance and its “subdued outlook for growth over the next two years”. After expanding 7.5 per cent in 2010, the country only grew 1 per cent in 2012 and 2.3 per cent last year.
Remember when the BRICs were going to rule the world? Well, we suppose Russia has Crimea…