(Adds details on fiscal and economic situation, quotes) BRASILIA, Nov 18 (Reuters) - Credit ratings agency Fitch on Wednesday affirmed its ‘BB-’ rating on Brazil’s sovereign debt and kept its negative outlook, citing the sharp widening of the government’s budget deficit, soaring debt and uncertainty regarding fiscal consolidation prospects. While noting that Brazil’s large foreign currency reserves, liquid domestic debt market and flexible exchange rate can help absorb any shocks, Fitch said there is uncertainty around the government’s fiscal rules next year, the amount of debt it has to roll over, and “fluid” politics. “The negative outlook reflects the severe deterioration in Brazil’s fiscal deficit and public debt burden during 2020 and persisting uncertainty regarding fiscal consolidation prospects, including the sustainability of the spending cap,” Fitch said. “Moreover, rising near-term domestic debt maturities amid a heavy public debt burden make Brazil vulnerable to shocks, including shifts in domestic investor confidence and financing conditions,” it added. Fitch estimates Brazil’s Treasury will have to roll over more than 1.1 trillion reais ($207 bln) next year, around 15% of projected gross domestic product, a large chunk of that in the first four months. Fitch expects Latin America’s largest economy to contract 5.0% this year and rebound 3.2% next year, thanks to the global recovery, growth in its main trading partner China, and a competitive exchange rate. Several downside risks could hamper the recovery, however, including the end of emergency income transfers, high unemployment, a second COVID-19 wave, tightening of social distancing measures, and loss of market confidence in the fiscal consolidation path. Fitch expects the government’s debt burden to reach nearly 95% of GDP this year from 75.8% last year, significantly higher than the median 59.9% of BB-rated countries, it said. The Brazilian government’s nominal budget deficit is expected to widen to a record 16.7% of GDP this year before narrowing to 7% next year, Fitch said. (Reporting by Jamie McGeever in Brasilia and Bhanvi Sajita in Bangalore; Editing by Diane Craft and Paul Simao)