(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
S&P Raises Portugal's Credit Rating to 'A' Citing Strong Finances
(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)
