On August 29, S&P Global Ratings elevated Portugal’s sovereign credit rating to ‘A+’ from ‘A’, highlighting the nation’s robust external financial position and sustained economic resilience. The decision reflects expectations that Portugal will continue reducing its external debt burden in the coming years. n nAlthough global trade tensions and economic uncertainties persist, the agency noted that Portugal is on a moderate growth trajectory, supported by solid performance in domestic demand and external sectors. The country’s second-quarter economic rebound was driven by stronger private consumption and export activity, including a 0.2% increase in tourism-related services—recovering from a 0.4% drop in the prior quarter. n nAccording to the National Statistics Institute, Portugal’s GDP expanded by 0.6% in the second quarter following a 0.4% contraction in the first three months of the year. This turnaround underscores the economy’s ability to adapt despite broader euro area challenges. n nS&P emphasized that Portugal’s tourism strength is likely to insulate it from potential disruptions linked to transatlantic trade policies, minimizing exposure to tariff-related spillovers within the region. n nLooking ahead, while defense expenditures are projected to rise and economic momentum may ease slightly in 2025, the agency forecasts a gradual decline in public debt relative to GDP through 2028, albeit at a slower rate. Growth is expected to pick up again in 2026, fueled by increased private-sector investment, before settling into a stable pattern toward the end of the decade. n nIn a related development, the Portuguese government unveiled a 4 billion euro ($4.68 billion) initiative last month aimed at modernizing major port infrastructure over the next ten years, with three-quarters of the funding anticipated to come from private investors. n nS&P also adjusted Portugal’s outlook to ‘stable’ from ‘positive’, signaling confidence in the country’s medium-term fiscal trajectory. n n($1 = 0.8542 euros) n
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S&P upgrades Portugal’s rating to ‘A+’ on economic resilience
Aug 29 (Reuters) – Global ratings agency S&P upgraded Portugal ‘s rating to “A+” from “A” on Friday, citing expectations of further external financial deleveraging as a key driver behind the upgrade. n nDespite heightened global and trade uncertainty, Portugal is set to post moderate growth and continues to enhance its external financing, the agency said. n nSign up here. n nPortugal ‘s economy rebounded in the second quarter, helped by private consumption and exports, including a 0.2% rise in services in the key tourism sector, reversing a 0.4% decline in the previous quarter. n nThe credit agency expects Portugal to remain largely unaffected by the EU-U.S. trade deal, with its strong tourism sector helping to offset broader euro zone tariff impacts and supporting financial deleveraging. n nThe National Statistics Institute earlier on Friday said that Portugal ‘s gross domestic product grew 0.6% in the second quarter from the previous three months, when the economy contracted by 0.4%. n nDespite rising defense spending pressures and a slight economic slowdown in 2025, the ratings agency said, “Portugal ‘s debt as a share of GDP will continue to decline, albeit at a slower pace during 2025-2028.” n nS&P expects Portugal ‘s economic growth will rebound in 2026, driven by accelerated private investments before stabilizing around 2027-2028. n nLast month, Portugal ‘s government announced an investment plan worth 4 billion euros ($4.68 billion) to expand and modernise its main ports over the next decade, with 75% of funding expected from private companies. n nThe agency also revised Portugal ‘s outlook to “stable” from “positive”. n n($1 = 0.8542 euros) n nReporting by Sruthi Narasimha Chari in Bengaluru and Sergio Gonçalves; Editing by Mohammed Safi Shamsi