Brazil dumped down to 'junk' credit rating by Standard & Poor's

BRICS nation Brazil saw its investment-grade credit rating downgraded by Standard & Poor's to "junk" status. The US agency explained that political turmoil and the failure of President Dilma Rousseff's government to tackle growing debt was behind the decision.

Brazil was awarded an investment-grade rating by S&P in April 2008, when the country's economy was on the rise. Sliding commodity prices and austerity have created a recession in the years since then.

Ms Rousseff's socialist government had implemented austerity measures in a bid to avoid such a downgrade.

S&P has downgraded Brazil - Latin America's largest economy - sooner than had been expected. The move is likely to cause a crash on the Brazilian stock market.

The Brazilian experience should serve as an example to other developing nations and emerging economies of what happens to nations that do not toe the US line. A sensible leader would now accelerate moves to ally Brazil with Russia and China.

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