The ratings on Brazil reflect a consistent macroeconomic framework that includes a floating exchange-rate regime and inflation-targeting framework. The political transition of 2002-2003 to the first Partido dos Trabhaladores (PT) government highlights progress in maintaining the continuity of a stable macroeconomic policy across party lines in Brazil. Inflation has trended down since 2002, and year-end inflation of 3.1% in 2006 was below the midpoint of the inflation-targeting band. Under an operationally independent central bank, average inflation is projected around 4% in 2007-2008. A decline in general government fiscal deficits over the past five years to a projected 2.9% of GDP in 2007-2008 reflects implementation of fiscal responsibility legislation across both the political spectrum and levels of government and the projected
