Portugal Returns to A+ Credit Rating After 15 Years
Fitch upgrades Portugal to A+ with a stable outlook, citing sustained debt reduction and strong budgetary performance that now rivals France and Belgium.
Portugal regained its A+ credit rating from Fitch for the first time since 2011. The agency raised the sovereign rating from A to A+ while maintaining a stable outlook. This marks a 15-year reversal of the country's financial standing.
Fitch cited stronger public finances and a sustained reduction in government debt as key drivers. The agency noted budgetary results considerably stronger than those of comparable peers. President António José Seguro called the move excellent news for the national economy.
Debt Trajectory Drives Rating Improvement
Fitch projects government debt to fall from 89.7% of GDP in 2025 to 87% this year. The agency expects the ratio to reach 82.9% by 2028. This decline is supported by continued primary budget surpluses and moderate economic growth.
Portugal’s debt burden remains high relative to global standards. The 2028 forecast sits well above the 59.5% median for A-rated countries. However, refinancing risks are contained by the euro-denominated nature of the debt.
Favorable Borrowing Conditions Emerge
A higher rating allows the state to secure financing on more favorable terms. This can improve conditions for banks and businesses in the broader economy. Finance minister Joaquim Miranda Sarmento described the upgrade as a victory for Portugal.
The upgrade places Portugal on the same Fitch level as France and Belgium. It signals increased confidence from international investors. The stable outlook reflects prudent policymaking and institutional stability within the eurozone.
Budget Performance Exceeds Peer Averages
Fitch expects the general government surplus to narrow to 0.1% of GDP this year. This remains far stronger than the 3% average deficit among A-rated peers. The agency highlights persistent current-account surpluses as a shock absorber.
Governance indicators for Portugal sit above the median for the A category. The agency credits the country’s capacity to absorb shocks. These factors underpin the decision reported by GN auto markets/bonds: sovereign debt.
