Bolsonaro’s party made notable gains in Brazil’s congress, but that body remains highly divided, which could impair the new president’s ambitious reform agenda.

“Congressional challenges to fiscal consolidation and pension reform are also likely to mean implementation challenges and risks lie ahead,” said Fitch. “Despite his party making substantial gains in Congress at the general elections, the legislature continues to be highly fragmented. Bolsonaro will require significant support from other parties in order to pass legislation, while pension reform will likely require a constitutional amendment or 60% support to pass in Congress.”

Investors added $1.21 billion to EWZ in the fourth quarter.

For more information on the Brazilian markets, visit our Brazil category.