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S&P upgrades Portugal rating on strong external financial position
Published by Global Banking & Finance Review®
Posted on February 28, 2025
1 min readLast updated: January 25, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on February 28, 2025
1 min readLast updated: January 25, 2026
S&P upgraded Portugal's credit rating to 'A', citing a strong external financial position and reduced liquidity risks, despite potential geopolitical uncertainties.
(Reuters) - Global ratings agency S&P upgraded Portugal to "A" from "A-" with a positive outlook, citing improvements in the country's external financial position and reduced liquidity risks.
Despite geopolitical uncertainty, particularly around potential U.S. tariffs on the EU, S&P remains optimistic about Portugal's economic growth.
While Portugal has limited direct exposure to tariffs, it could face secondary effects through its economic ties to the eurozone, particularly with Germany, which is more vulnerable to trade disruptions, the ratings agency said.
"Despite this, we are reassured by Portugal's strong policy track record in terms of its ability to maintain a declining government debt trajectory and continue external deleveraging," S&P said in a statement.
However, due to dwindling inflation and normalizing economic growth rates, S&P expects the pace of the country's government debt reduction will be slow in 2025-2028.
S&P also expects Portugal's GDP growth to moderate after 2026 as the NextGen EU stimulus weakens.
Rating agency Fitch in its last ratings action revised Portugal's outlook to "positive" from "stable" and affirmed its issuer default rating at "A-."
(Reporting by Sruthi Narasimha Chari in Bengaluru; Editing by Alan Barona)
S&P upgraded Portugal's credit rating to 'A' from 'A-' with a positive outlook.
The upgrade was attributed to improvements in Portugal's external financial position and reduced liquidity risks.
Despite geopolitical uncertainty, S&P remains optimistic about Portugal's economic growth.
S&P expects the pace of government debt reduction to be slow from 2025 to 2028 due to dwindling inflation and normalizing economic growth rates.
Fitch revised Portugal's outlook to 'positive' from 'stable' and affirmed its issuer default rating at 'A-'.
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