3 MIN. DE LECTURA
By Silvio Cascione
BRASILIA, Feb 18 (Reuters) - Standard & Poor's said on Thursday that it might downgrade Brazil's rating further into junk territory as a political crisis delays important measures to rebalance the country's finances.
S&P director Lisa Schineller said on a conference call that the agency would keep a negative outlook for the country's rating as long as political uncertainties remain, suggesting a greater than one-in-three likelihood of another downgrade following a ratings cut on Wednesday.
S&P downgraded Brazil's credit rating deeper into junk territory to BB from BB+ on Wednesday, just five months after becoming the first agency to strip the country of its coveted investment grade.
Brazil's overall budget deficit is likely to remain high and economic growth weak, Schineller said, as impeachment proceedings against President Dilma Rousseff put off measures to bolster tax revenue and reduce government spending.
"The fluid political dynamics keep the risk of policy inconsistency and policy reversals on the table," Schineller said. "We'll revise the outlook to stable if we see conditions for consistent policy execution."
Schineller said the social security reform proposed by Finance Minister Nelson Barbosa was "very important", but like other initiatives, it faces political challenges. She also highlighted the risk of a growing budget deficit amid discussions of a flexible fiscal target.
"The fiscal trajectory continues to weaken," she said. "The ability to correct in the near term is definitely challenging."
She also cited the "very high likelihood" that Petroleo Brasileiro SA, the state-run oil producer known as Petrobras, would receive some extraordinary government support as it struggles to reduce its debt.
"We expect the government to be there to provide assistance in an ultimate moment if needed," Schineller said.
Two sources have said Brazilian state-run lenders were considering converting some or all of their outstanding loans to Petrobras into equity. The world's most indebted oil company is struggling with a sharp drop in crude prices and a multibillion-dollar corruption scandal.
Brazil's budget deficit has ballooned since Rousseff became president five years ago to 10.3 percent of gross domestic product last year, nearly five times its shortfall in the 12 months to mid-2011.
The nation's economy, the largest in Latin America, is on track for its worst recession since records began in 1901, after contracting around 4 percent last year.
More than 1.5 million Brazilians lost their jobs in 2015, contributing to Rousseff's wilting approval ratings and popular support for her impeachment. (Reporting by Silvio Cascione; Editing by Lisa Von Ahn)