Moody's places Brazil's Baa3 rating on review for a downgrade

  • Turnaround in 2016 unlikely, Moody's says
  • Assumption of Brazil return to 2% GDP growth at risk
  • Revenue shortfalls will likely occur in 2016
  • Cites rapidly and materially deteriorating macroeconomy and fiscal trends

Emerging market commodity producers are about to have a very bad year.

On Dec 1, Brazil reported Q3 GDP down 4.5% y/y compared to 4.2% expected. In the quarter alone, the economy contracted 1.7% vs 1.2% expected. That's a depression-level quarterly contraction. The prior quarter was also revised lower.