Internationally renowned rating agency Moody's has upgraded Portugal's Ba3 rating outlook from negative to stable, stating that as exports increase and unemployment decreases, Portugal's economic outlook is gradually improving. This indicates that the likelihood of a downgrade in Portugal's rating in the short term has decreased.
After experiencing a recession lasting three years, Portugal's economy has finally shown signs of stabilization. In recent months, Portugal's unemployment rate has begun to decline, with the rate in September at 16.3%, down from a high of 17.7% in January.
Moody's stated that while Portugal's success is mainly attributed to its ability to export to countries outside the European Union (EU), the recovery in Spain and the entire Eurozone has also provided a boost to Portugal.
Moody's expects Portugal's Gross Domestic Product (GDP) to grow moderately by 0.7% in 2014; the country may achieve a primary budget surplus in 2014, the first time since 1997.
The agency also stated that Portugal's overall government debt ratio is expected to begin to decline, with government debt as a percentage of GDP projected to decrease for the first time since 2007 next year.
