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S&P upgrades Portugal debt outlook, citing growth
WASHINGTON, Sept 15, 2018 (BSS/AFP) – Global ratings agency S&P on Friday
upgraded its outlook for Portugal’s sovereign debt rating to “positive,”
pointing to improving growth, fiscal health and falling debt levels.
The agency left in place its lower-medium grade “BBB-” rating but said
there was a chance this could be upgraded if financial stability and public
and private debt levels continued to improve.
“We could raise our ratings on Portugal if the economy continues to de-
leverage externally at its current pace of 3 percent – 5 percent of GDP per
year, a process that would reduce the country’s still high stock of net
external debt,” S&P Global said in a statement.
In 2014, Portugal exited an international bailout program that began at
the height of the EU debt crisis.
However S&P said the European nation still labored under “elevated, albeit
declining” public and private-sector debts, with “still-high” levels of non-
performing loans in local banks.
The budget deficit shrank from two percent in 2016 to 0.9 percent last
year. Meanwhile, the economy should expand by 2.3 percent this year, down
from 2.7 percent in 2017, which had been the strongest pace in nearly 20
years.
Real estate prices have risen 12 percent in the last year due to foreign
investment.
“We anticipate that the government will continue to focus on budgetary
consolidation and financial stability issues during the remainder of its
term,” S&P said.
BSS/AFP/HR/0925