Fitch Ratings announced on Thursday that it revised Brazil's outlook from negative to stable, but affirmed its credit rating at "BB-."
The revision in outlook is the result of the "better-than-expected evolution of public finances amid successive shocks in recent years," the rating agency said in a statement.
"Last year, Brazil recorded its first primary fiscal surplus since 2013, highlighting revenue outperformance and the authorities' commitment to withdraw stimulus implemented during the pandemic," it added.
Though inflation in Brazil remains high at 11.9% in June due to a surge driven by food and energy prices, Fitch said the country's tax cuts would "cushion the blow" of high energy and other prices.
The rating agency expects inflation to fall to 7.8% by the end of the year.
