Standard&Poor's Ratings Services bases its ratings on the Federative Republic of Brazil on the country's strengthening prospects for steady, long-term GDP growth-–despite the recent deceleration--and its modest current account and fiscal deficits that should gradually reduce the country's vulnerability to external shocks at times of growing uncertainty in the global economy. Brazil's diverse economic structure, its expanding middle class, and the potential for higher exports should sustain both GDP growth and external liquidity in the next three to five years. Political consensus in favor of cautious fiscal and monetary policies likely would contain the risk of economic dislocation that could result from potential shocks. In our view, the authorities' maintenance of a prudent fiscal performance, to allow a
