Moody’s mulls rating hike for Portugal

Portugal’s careful budget control is likely to result in the ratings agency Moody’s raising the country’s rating today according to analysts.

Moody’s currently evaluates Portugal’s rating at Baa2 with a stable outlook for Portugal’s sovereign debt.
According to the news agency Lusa Portugal is likely to get a better classification today because Portugal’s ratio of debt to GDP is falling.
“Taking into account the recent upward reviews for Portugal’s growth this year, and downward reviews for the budget deficit and public debt, Moody’s could increase its rating from Baa2 to Baa1”says Filipe Garcia, President of the IMF’s Department of Information and Financial Markets.
The analyst points out, however, that the agency will take into consideration Portugal’s recent political instability, and the fact that both interest rates and spread vs benchmark are at higher rates than seen in September 2021 when Moody’s last raised Portugal’s sovereign debt rating.
That said, the analyst thinks the fact that the forecasts for Portugal’s debt ratio show a downward trend could be enough to raise the rating.
Filipe Silva, director of investments at Banco Carregosa also expects an improvement in Portugal’s rating for sovereign debt, emphasising: “Portugal continues to enjoy a positive period for its economy”.
“Although we have inflation and higher interest rates, the economy has managed to display some resilience with various sectors experiencing a strong bounce-back. Our ratio of debt to GDP has been falling, a trend that we hope will continue.”

Photo. Lusa (EPA), Andrew Gombert