According to Portugal Business News, Fitch upgraded Portugal’s long-term Issuer Default Rating (IDR) from a BBB+ upgrade on 28 Oct 2022 to an A- “with a Positive Outlook” on 20 Sept 2024.
Fitch also upgraded Portugal’s country ceiling from an AA+ upgrade on 28 Oct 2022 to an AAA affirmed on 20 Sept 2024, showing how Portugal has managed to improve its economy within the last few years.
What is Portugal’s economic outlook in the next few years?
Fitch just gave Portugal a Positive Outlook in September 2024 and is expecting a positive economic outlook in the next few years. This is due to Portugal’s continued progress in reducing public debt, its record of and commitment to prudent fiscal policy, and its ongoing external deleveraging, which reduce Portugal's vulnerabilities.
Portugal’s economic outlook by the end of 2024 is expected to be a moderate economic growth and a modest budget surplus to reduce Portugal's government debt to 95.8% of GDP, from 99.1% at the end of 2023, according to Fitch.
Portugal’s economic outlook in 2026 is projected to be continued debt reduction to 88.1% in 2026, according to Fitch.
Portugal’s economic outlook in 2028 is projected to be a further debt reduction to 82.5% in 2028.
Fitch is expecting a positive economic outlook for Portugal in the next few years, that will be driven by high primary surpluses and sustained growth. Portugal's debt profile is supported by its substantial cash buffers and a high proportion of fixed-rate debt.
The Country Ceiling for Portugal is 'AAA', six notches above the LTFC IDR and at the upper limit of the rating scale and Fitch views the risk of exchange and capital controls as de minimis.
