Charges that Brazilian President Michel Temer took bribes have weakened his plans to streamline the social security system, threatening the country’s credit quality, Moody’s Investors Service analysts wrote in a Monday report.
The resulting political turmoil may force Temer to dilute the planned pension reform or boost spending to guarantee lawmaker support, Moody’s analysts Anna Snyder and Samar Maziad wrote, adding that they expect him to conclude his term. Moody’s rates Brazil at Ba2 with a negative outlook.
The denunciation of President Michel Temer for passive corruption has weakened the government’s plans to approve a pension reform that threatens the country’s credit quality, Moody’s said on Monday.
The political turmoil could force President Temer to dilute the proposed pension reform or increase spending to secure congressional support, Moody’s analysts Anna Snyder and Samar Maziad said, adding that they expect Temer to complete the mandate.