Rio de Janeiro has once again received the highest rating from Fitch Ratings: the agency upgraded the Municipality’s National Long-Term Rating from AA+(bra) to AAA(bra), returning the city to the highest level on the national credit rating scale. The decision recognizes the Municipality’s fiscal recovery, highlighting the consistent improvement in public finances, its strong liquidity position, and the prospect of debt reduction. Fitch also upgraded Rio’s Standalone Credit Profile (SCP) from “BB” to “BB+”.

> “When we took office in 2021, we found the city in a very difficult fiscal situation. From day one, the budget was closely scrutinized — expense by expense, revenue by revenue, contract by contract. Now, Fitch’s AAA rating is recognition of that work. There are no miracles in public administration. What matters is responsibility, planning, control, and constant monitoring,” said Rio Mayor Eduardo Cavaliere.

On Fitch Ratings’ national scale, ratings range from C, indicating a high risk of default, to AAA, the highest level of creditworthiness. Between these extremes, ratings include CCC, B, BB, BBB, A, and AA, reflecting progressively higher levels of financial capacity and lower credit risk.

According to the agency, the new rating reflects consistent improvements in the Municipality’s fiscal management in recent years, resulting in solid operating margins and strong liquidity indicators. Fitch expects Rio’s debt to decline gradually over the coming years, with debt repayments exceeding new borrowing.

> “Fitch assessed the continued strength of the Municipality’s fiscal management over the past five years and its sustainability in the years ahead. The Municipality has demonstrated that it was able to completely reverse the agency’s previous assessment, which was still influenced by the lack of liquidity found at the beginning of the administration in 2021. Achieving the highest rating on Fitch’s national scale today recognizes the consistent work carried out to restore public finances and, above all, confirms that Rio has built solid foundations to maintain this fiscal balance in the future,” said Municipal Finance Secretary Andrea Senko.

The achievement is the result of a recovery process that began in 2021. After an initial cycle between 2009 and 2016, marked by high levels of investment and major urban transformations, Rio went through a period in which its investment capacity declined sharply. Between 2017 and 2020, investments accounted for an average of just 2.6% of the municipal budget.

In 2021, the city government faced a severe fiscal imbalance: a deficit of approximately R$6 billion, R$4.9 billion in outstanding payment obligations, nearly depleted cash reserves, and personnel expenses above the legal limit.

From that point onward, a broad effort to rebuild municipal finances began, supported by measures such as the New Fiscal Regime, pension reform, tax simplification, and real growth in tax revenues. In the first year alone, cash availability returned to positive territory and Rio regained its payment capacity, improving from CAPAG C to CAPAG B.

The results of this turnaround are reflected in the city’s main indicators. Between 2020 and 2026, the municipal budget increased from R$30.5 billion to R$53 billion. Service Tax (ISS) revenue rose from R$5.9 billion to R$10.1 billion, while investments once again reached 10.5% of the budget, compared with an average of just 2.6% between 2017 and 2020.

According to Fitch’s report, Rio has moderate control over expenditure growth, with solid margins. Between 2021 and 2025, the Municipality recorded an average operating margin of 11.6%, reaching 11.8% in 2025. Fitch also notes that Rio is current on payroll obligations and has no overdue payments to suppliers. Over the same period, real growth in operating revenues exceeded expenditure growth.

Another point highlighted is the city’s debt position. In December 2025, consolidated net debt amounted to 35.8% of net current revenue, well below the 120% limit established by Brazil’s Fiscal Responsibility Law.

The assessment also highlights important characteristics of Rio’s economy and public finances. The city enjoys a relatively high degree of fiscal autonomy, with low dependence on federal government transfers compared with other public entities, as well as limited exposure to more volatile revenue sources such as oil and gas royalties. In 2025, tax revenues accounted for 42.3% of the Municipality’s operating revenues.

On the international scale, the Municipality remains rated BB with a stable outlook because, under Fitch’s methodology, the international ratings of Brazilian local governments are capped by Brazil’s sovereign rating. Therefore, this classification does not reflect a specific limitation in Rio’s finances, but rather the ceiling established by the country’s credit rating.