DBRS upgrades Portugal to ‘A’

The ratings agency DBRS has raised the rating on Portugal’s national debt to ‘A Stable Outlook’ for the second time in the space of a year.

The agency did so because Portugal’s national debt is in a better shape than it was a year ago, despite the challenging international panorama with Portugal now converging with Spain in the bond markets, moving increasingly away from the situation in which Portugal’s debt was considered ‘junk’ or speculative status for nearly a decade.
The rating on Portugal’s sovereign bonds by the Canadian agency is now set at ‘A’ (Outlook stable) investment grade’. Over a year ago it was ‘BBB’ with a positive outlook and then increased to ‘A’ in August.
DBRS says that Portugal’s overall rating for the economy has been upped because its economic performance has improved. “Portugal’s public finances have benefitted from healthy economic growth. It also cites a consistent increase in tax revenues and a rapid post-Covid-19 bounce-back in consumer spending, all of which helped reduce the national debt.
The Portuguese government has also been praised for its budgetary discipline, particularly for bringing the deficit down in 2022 and the expected surplus for this year.
On growth, which could slow this year but still be above the EU member State average, Portugal’s Recovery and Resilience Plan could give an added boost.