By Kelly Cloonan
Fitch Ratings upgraded Portugal’s ratings by one step, citing falling government debt and a balanced fiscal position.
The ratings agency on Friday upgraded Portugal’s long-term foreign-currency issuer default rating to A from A-.
The country’s debt ratio fell to 96.4% of GDP in the first quarter of this year from a high of 134.1% in 2020, marking one of the largest declines among its rated sovereigns, Fitch said. The drop reflects robust growth and sizable surpluses as well as a strong record of prudent fiscal policy, Fitch said.
The rating agency forecasts Portugal’s public debt will fall further, to 88.4%, at the end of 2027, well above the forecasted 53.7% median for A-rated countries.
Portugal’s fiscal position has continued to outperform its peers, Fitch said. The rating agency expects a budget surplus of 0.1% of GDP in 2025, compared with the A-rated median deficit of 2.9%.
Portugal’s government aims to reduce the tax burden on households and firms, boosting growth while maintaining a surplus. New spending measures, including income tax cuts and one-off pensioner payments, and reverse repurchase agreement loans will be partially offset by resilient consumption and tax revenues, Fitch said.
Write to Kelly Cloonan at kelly.cloonan@wsj.com
(END) Dow Jones Newswires
09-12-25 1741ET