Fitch upgrades Portugal

Fitch Ratings said it raised Portugal’s long-term foreign-currency issuer default rating to BBB+ from BBB.

“Underpinned by a strong commitment to prudent fiscal policy, and despite significant external shocks, fiscal outturns have persistently outperformed both the BBB rating category and European peers. Portugal's fiscal deficit is projected to meet the government's target of 1.9% of GDP this year (vs 2.8% in 2021 and vs 5.8% in 2020),” Fitch said in a press release.

“We forecast Portugal's GDP to expand by 6.4% this year (vs 5.5% in 2021). Driven by a robust recovery in the tourism sector. Falling unemployment has been accompanied with increased labor market participation, with the number of employed persons above pre-pandemic levels. However, with the European energy crisis, high inflation, and tighter monetary policy, we expect a slowdown of the economy from 2H22 into 2023,” the agency said.

The outlook is stable.

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