Portugal rating to BBB+
The ratings agency Standard & Poor’s has raised Portugal’s rating one level to BBB+ because of its growth and budget.
The Bank of Portugal (BoP) posted a primary surplus for 2022 and a GDP growth forecast of 6.3% for the year.
According to Bloomberg, Portugal’s government bond rating was raised by S&P Global Ratings, which cited the country’s “strong growth, labor market, and fiscal outcomes”.
S&P lifted the rating to BBB+, with a stable outlook, from BBB, it said in a statement on Friday. It’s the country’s highest rating from S&P since 2011, when the rating company downgraded it to BBB from A-.
“Portugal’s growth prospects are resilient, despite risks stemming from the fallout of the Russia-Ukraine conflict,” S&P said. “General government debt will remain on a strong downward trajectory.”
The country’s economy is trying to bounce back after the pandemic, while also facing the impact of the war in Ukraine. For Portugal, which has the third-highest debt ratio in the euro area behind Greece and Italy, tourism represents about 15% of the economy.
S&P said it expects Portugal to post a primary budget surplus, which excludes interest payments, this year. It sees an overall deficit below the government’s target of 1.9% of gross domestic product, heading for a balanced budget in 2025.
Portugal’s 10-year bond yield was at 2.75% on Friday, compared to about 1% six months ago . It peaked at 18% in 2012 at the height of the euro region’s debt crisis.