Katie Lance
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Katie Lance in Economics & Politics,

Brazil's credit rating downgraded to junk

Brazil's debt is now in junk territory.

The country's debt was downgraded by Standard & Poor's Wednesday after markets closed.

S&P rated Brazil's debt BB+ with a negative outlook, which means another cut is possible. Junk status will make it harder and more expensive for Brazil to borrow money.

Brazil had avoided a junk rating for the past seven years as its economy boomed. But the country recently fell into recession, and there are major concerns about the future of the economy, the currency and most importantly, Brazil's leadership.

Brazil's state-run oil company, Petrobras, is in a massive corruption scandal tied to many members in President Dilma Rousseff's political party. The large money-laundering scandal spans across oil, business and political leaders in the country.

The scale and size of the corruption case has angered Brazilians so much they are now calling for Rousseff's impeachment.

Rousseff, who has an 8% approval rating, has meanwhile continued massive spending for public welfare programs that some experts consider unsustainable in a spiraling economy.