Fitch forecasts Portugal’s debt at 113.5%

The US ratings agency is more pessimistic than the government regarding Portugal’s public debt this year and next.

The agency, according to Executive Digest and Negócios, believes that Portugal will be one of the countries to have a public debt ratio for the end of 2022 lower than pre-pandemic levels, falling from 114.9% of GDP in 2022, after being 125.5% the previous year.
For this year, the expectation is 113.5% of GDP and a fresh reduction to 108.2% in 2024. The forecast for the end of 2022 is in line with that of the Ministry of Finance of 2022. However, in 2023 the government believes that the public debt ratio will continue to fall to 110.8% of GDP.
Fitch says that in Portugal’s favour is the entry of European funding through the Recovery and Resilience Plan, as well as an economic growth which is above that of Portugal’s European partners.
The financial ratings agency also expects that Portugal’s GDP will have grown 6.6% for 2022 and this year will grow 1%.
In both cases, Fitch is more pessimistic than the government which points to 6.8% in 2022, whereas in the State Budget the Ministry of Finances forecasts a growth of 1.3% in 2023.