BRASILIA (Reuters) - Finance Minister Guido Mantega told Reuters on Thursday that Fitch's decision to maintain Brazil's debt outlook at stable was "fair" given the country's robust finances and dwindling net debt burden.
The market had widely expected Fitch to lower Brazil's debt outlook to negative, following its peer Standard & Poor's which downgraded the South American nation's outlook last month.
"I think this is a fair decision for Brazil," said Mantega, who found out about Fitch's decision during an interview in his office. "The make up of the Brazilian debt has improved greatly."
Fitch's decision comes at a time when the Brazilian government is struggling to regain investors' confidence as the economy fails to pick up speed and inflation remains high after two years of aggressive public spending.
Fitch acknowledged the deterioration of the Brazilian economy after erratic policies, but said the government is moving in the right direction to remove lingering uncertainties.
"Despite the difficult domestic economic environment and the policy missteps by the authorities in recent months, Fitch believes that there are signs of policy corrections that, if sustained, could help to restore confidence," Fitch said in a statement in which it also reaffirmed Brazil's debt investment-grade rating.
Moody's Investors Services told Reuters in June that it could remove the "positive" outlook on Brazil's investment-grade rating due to a sluggish economy and deteriorating finances.
After expanding an average 3.6 percent over the past decade, growth in Brazil's economy has slowed to 1.8 percent since 2011 in the wake of supply bottlenecks and low levels of investment. The economy grew only 0.9 percent last year.
While the Brazilian economy remains weak, inflation has remained at the upper end of the official target of between 2.5 percent and 6.5 percent. Although recent price indicators show inflation easing in recent months, most analysts see inflation ending the year close to 6 percent.
The Brazilian central bank has moved to tame prices with aggressive rate hikes after being heavily criticized for bringing its benchmark Selic rate to record lows despite high inflation last year.
In recent months, President Dilma Rousseff's government has also unwound a series of capital controls to prevent its real currency from depreciating too fast on expectations of a tapering in the U.S. Federal Reserve's quantitative easing.
(Reporting by Alonso Soto and Luciana Otoni; Editing by Phil Berlowitz and Carol Bishopric)
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