(Adds background on Brazil’s rating, fiscal target)
By Walter Brandimarte
SAO PAULO, Oct 28 (Reuters) - Fitch Ratings on Wednesday expressed concern about Brazil’s deteriorating fiscal accounts after the government said it will post a record budget deficit this year.
The agency, which cut Brazil’s rating to the brink of junk less than two weeks ago, said the government’s decision to give up on its 2015 primary budget target underscores the “growing challenges Brazil is confronting to consolidate its fiscal accounts.”
Instead of a surplus, the Brazilian government now estimates it will record a primary budget gap, or a deficit before interest payments, of at least 51.8 billion reais this year ($13.3 billion).
“Fiscal slippage and an increasing government debt burden have been a source of concern for us,” Fitch director Shelly Shetty said in an emailed statement.
She noted Fitch keeps a negative outlook on Brazil’s BBB-minus credit rating, which means the rating can be cut again in case of “continued economic and fiscal underperformance.” (Reporting by Walter Brandimarte; Editing by Chizu Nomiyama and Chris Reese)