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Solid Brazil will avoid writedown -- minister
AFP Solid Brazil will avoid writedown -- minister

Brasília (AFP) - Brazil's economic fundamentals are solid and it should avoid a credit rating downgrade, Finance Minister Guido Mantega told foreign journalists Friday.

Recent months have seen Standard & Poor?s and Moody?s both indicate the possibility of a downgrade for Brazil, which holds presidential elections in October, over worsening public finances.

But Mantega dismissed the notion.

"I have seen several erroneous analyses making Brazil one of the weakest economies," said Mantega.

He added: "Brazil has conditions to maintain the solidity of public accounts and a path of growing investment," and would hold onto its investment grade rating.

Mantega cited high reserves and low short term external debt as reasons for his general optimism a day after he announced the government was to trim 44 billion reais ($18.5 billion) from its 2014 spending plans.

The minister said he believed the credit agencies had "apparently" positively received that announcement as well as Brazil's stated aim of posting a primary surplus equal to 1.9 percent of gross domestic product in 2014.

"For us it is more important to maintain budgetary solidity than follow a policy of economic stimulus," he added.

The primary surplus, which excludes payments on interest, would help to cut debt, he said.

Mantega also said it was too early to know if Brasilia will face extra spending on electricity to counter low water reserves in hydroelectric reservoirs following unseasonally low rainfall this year to date.

The government has four billion reais set aside in a contingency fund for that purpose.

Thursday, Brasilia dropped its growth forecast for this year from 3.8 percent to 2.5 and forecast inflation of 5.3 percent.

Inflation stood at 5.91 percent at year's end, outpacing market expectations.