Fitch raises Portugal’s rating to “BBB+” with stable outlook | Evaluation
The financial rating agency Fitch decided this Friday to raise the Evaluation (evaluation) of Portugal from “BBB” to “BBB+”, with the panorama (perspective) stable.
“Fitch Ratings has risen Evaluation term of Portugal from “BBB” to “BBB+”. O panorama is stable,” the rating agency said in a statement.
This is the third improvement of the Evaluation of the Portuguese Republic, after the DBRS and from to Standard & Poor’s has also been pronounced in the same sense.
Fitch justified this decision with the fact that Portugal has a “prudent policy, despite reporting shocks”. On the other hand, the government must meet and meet the target of 1.9% of Gross Domestic Product (GDP) this year, up to 2.8% from 2021 to 5.8% in 2020.
It should be noted that the budgetary results point to a better performance, with a setback in the second half of the year.
Fitch also estimates that Portugal’s debt ratio declined by 10.5 percentage points in the current year. “A track record of disciplinary fundamentals from the current ruling party to the basis of Fitch’s ongoing debt”, forecasting primary super fiscals of 0.2% of GDP this year and 1.5% in 2023.
Thus, he noted that, “despite the headwinds caused by the high tax and from a weak environment it is expected that the negotiated foreign policy, with the Government’s goals, will be guaranteed.
The announced improvement also reflects the governance and GDP per capita of Portugal, above the average of its peers. The rating agency also expects Portugal’s GDP to grow 6.4% this year, compared to 5.5% in 2021, driven by a “robust recovery in the tourism sector”. In addition to the fall in the unemployment rate and the increase in the number of people working, above pre-pandemic levels of Covid-19.
However, “with an energy crisis, high inflation and a tighter economic policy, we expect a slowdown in the economy from the second half of the year”. Thus, it is estimated that the purchasing power of families has fallen and that private sector activity is moderate.
For 2023, Fitch anticipated a slowdown in GDP growth to 1%, followed by a recovery to 2.2% in 2024.
In the released document, the agency also warned of the fact that Portugal continues to expose to global prices commoditiesdespite “limited direct exposure to the energy supply shock in Europe”.
Fitch said that an increase in interest rates also affects families, namely, due to housing credit, although there are attenuated factors.
The next, and final, planned look at the Evaluation from Portugal is the Moody’sthe 18th of November.
O Evaluation is an assessment of assessments by major financial rating accounts, with an impact on the financing of countries and companies, as it assesses the risk of companies, as it assesses the risk of companies. Evaluation they are not, however, merely indicative, and these options may not be pronounced on the permitted dates or may be subject to a scheduled evaluation.