According to a comprehensive report from WorldWay: International rating agency Moody's upgraded Portugal's government bond rating from "Ba2" to "Ba1" on July 25, with a stable outlook. Moody's stated that the rating reflects the government's firm commitment to fiscal consolidation, despite setbacks from adverse Constitutional Court rulings. Meanwhile, the stable outlook reflects a broadly balanced assessment of upside and downside risks.
Moody's expects Portugal's fiscal consolidation to remain on track. The agency also indicated that current uncertainties surrounding Banco Espirito Santo will not have a material impact on the country's credit profile.
The agency believes that in addition to high public debt, Portugal's high external debt remains a key credit weakness.
However, Moody's noted that given the extensive structural reforms implemented over the past few years, there may be more upside risk to Portugal's economic growth prospects.
WorldWay Editor
