Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

S&P upgrades Portugal to 'BBB+' from 'BBB', despite external shocks

Economy Sep 10, 2022 14:10
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: A person walks near Cais do Sodre during the national lockdown, amid the coronavirus disease (COVID-19) pandemic, in Lisbon, Portugal, January 23, 2021. REUTERS/Pedro Nunes 2/2

By Sergio Goncalves

LISBON (Reuters) - Ratings agency Standard & Poor's (S&P) upgraded Portugal's long-term issuer rating to 'BBB+' from 'BBB', seeing further improvement in the country's public finances, and good economic prospects despite external headwinds.

After a sharp economic contraction of 8.4% in 2020, Portugal's recovery has been strong; gross domestic product (GDP) grew 4.9% last year and the European Union Commission sees it growing 6.5% this year.

"Despite higher energy costs and rising interest rates, Portugal has continued to post strong growth," S&P said in a statement late on Friday.

"The upgrade reflects the resilience of Portugal's economy, public finances, and largely foreign-owned financial sector to various external shocks."

S&P said the rating outlook was stable.

It added investment was set to rise on the back of an expected 61.2 billion euros, or 26% of GDP, in EU funding between 2022 and 2027, which would "provide a strong boost to the economy, regardless of external conditions."

The government expects Portugal's debt-to-GDP ratio, which finished last year at 127.4% -- slightly below 2020’s record highs of 135.2% -- to end this year at 120.8%.

Portugal envisages deficit reduction of 1.9% of gross domestic product this year, compared with 2.8% in 2021.

S&P said that "strong tax collection during 2022, boosted by higher growth and inflation and the government's caution on expenditure", would bring the deficit below target in 2022 and into balance by 2025.

Portugal's Finance Minister Fernando Medina welcomed the move, saying it would translate into lower borrowing costs not just for the government but also for companies and families.

S&P upgrades Portugal to 'BBB+' from 'BBB', despite external shocks
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email