The Investment Director at Banco Carregosa, Filipe Silva, stated to Lusa that “it is possible that Moody’s will raise Portugal’s rating, currently at A3, during its next assessment,” which is expected to be announced this Friday.
“This increase would be driven by strong macroeconomic fundamentals, a series of budget surpluses, a rapid decrease in the public debt-to-GDP ratio, an improved state financing profile, and a resilient labor market,” he explained. This move would align the agency with its peers: S&P, Fitch, and DBRS, reflecting a perception of lower sovereign risk and an economy better able to absorb shocks.”
Conversely, João Cruz, market analyst at Xtb, mentioned to Lusa that “no change is expected in Portugal’s rating, which should remain at A3.”
The analyst highlighted that “the Portuguese economy continues to demonstrate resilience with growth surpassing the eurozone average and public accounts under control, supported by prudent budget management,” while public debt “is on a downward trajectory, approaching 95% of GDP, and the positive budget balance reinforces the perception of fiscal stability.”
Regarding the outlook, Filipe Silva believes that it should remain stable/positive.
“The Portuguese economy should continue to show resilience and grow at a healthy pace over the next two years, supported by PRR investments and the expected decline in inflation and interest rates,” he noted.
On the other hand, João Cruz believes that despite room for a gradual outlook revision, “the most likely scenario is continuity, reflecting the balance between internal progress and external challenges.”
“Since May, Portugal’s economic situation has not undergone major changes, but future prospects continue to improve – according to the latest government statements in October – predicting a primary surplus of 0.1%, maintaining the last revision, totaling 2.1% of GDP,” he noted, although Moody’s “should remain cautious, considering the weak growth in the eurozone, interest rates remaining around 2%, and an uncertain international context – which could hinder Portuguese economic growth.”
Ratings are assessments given by financial rating agencies and have a significant impact on the financing of countries and companies, as they evaluate credit risk.
