Portugal's Strong External Financial Position Leads to Credit Upgrade
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. The rating agency expects Portugal's government debt reduction to be slow in 2025-2028 as inflation dwindles and economic growth rates normalize.
- The upgrading of Portugal's credit rating highlights the resilience of small economies in navigating global uncertainty, potentially setting a precedent for other European nations facing similar challenges.
- Will this upgraded credit rating translate into increased investor confidence and borrowing costs for Portugal in the long term?