Rio state declares financial emergency just before Olympics 2016
Rio de Janeiro's governor declared a state of financial emergency Friday and requested federal funds to help fulfil obligations for public services during the Olympics that start August 5, Reuters writes.
Emergency measures are needed to avoid “a total collapse in public security, health, education, transport and environmental management,” a decree in the state's Official Gazette said.
The state's revenue, largely tied to the petroleum industry, slumped in the last two years as global oil prices collapsed.
The state of Rio expects a budget deficit of over 19 billion reais ($5.56 billion) this year as spending planned before oil prices fell outstrips revenue that is tumbling during Brazil's recession.
Rio state's debt has been downgraded several times.
According to the source on Wednesday, Fitch Ratings downgraded Rio's debt rating to 'B-' from 'B+', saying the state was suffering “a fast-deteriorating liquidity position”.