The South American giant is now one step away from the agency's investment grade, thanks to the significant improvement in credit, a product of the robust performance of GDP growth and the recent history of economic and fiscal reforms.

Moody's has upgraded Brazil's sovereign credit rating to 'Ba1' from 'Ba2', maintaining its positive outlook, putting the country one step away from the agency's investment grade.

In its statement, Moody's mentions the significant improvement in the country's credit rating, which is due to the robust performance of GDP growth and the recent history of economic and fiscal reforms.

In this context, the agency draws attention to the relevance of the commitment to fiscal objectives and the path of stabilization of debt over GDP, considering these factors fundamental for the positive outlook of the new rating.

Mentioning the importance of several recent reforms to improve the country's growth prospects in the medium term, the agency highlights the tax reform, which will improve the business environment and resource allocation, increasing long-term growth potential. In addition, the government's energy transition agenda is highlighted as a factor that not only attracts private investment, but also reduces the country's vulnerability to climate shocks.

On the fiscal front, Moody's expects a gradual improvement in the government's primary results, in line with fiscal targets for the next three years. This expectation is based on efforts to increase revenues and on spending reduction initiatives. According to the agency, although debt and interest expenses are considered high, Brazil has significant liquid assets and is financed mainly in local currency in the domestic market.

In this regard, the Ministry of Finance has reaffirmed its commitment to the continuous improvement of fiscal results, making efforts to increase revenues and contain expenses.

"The improvement of the credit rating by Moody's reflects the recognition of the progress in public accounts, a favorable scenario for growth and the solid foundations of the Brazilian economy," the government said.