On Jan. 13, 2004, Standard&Poor's Ratings Services affirmed its 'B+' long-term and 'B' short-term foreign currency sovereign credit ratings and positive outlook, as well as its 'BB' long-term and 'B' short-term local currency sovereign credit ratings and stable outlook, on the Federative Republic of Brazil. The ratings on Brazil are constrained by: A large general government debt burden that, despite ongoing improvement, continues to be vulnerable to interest- and exchange-rate movements. Net general government debt is projected at about 60% of GDP in 2004, and interest payments on the debt, while declining, are still high at more than 20% of general government revenue. Given the magnitude of the debt burden, there is limited room for countercyclical fiscal policy
