The DBRS financial rating agency is expected to keep the rating and outlook for Portuguese sovereign debt unchanged, at “BBB” (high) with a “positive” outlook, in the evaluation scheduled for this Friday, according to analysts consulted by Lusa.
In February, DBRS maintained the Portuguese sovereign debt rating at “BBB” (high), but upgraded the outlook from “stable” to “positive”.
DBRS should maintain the rating of the Portuguese sovereign debt, as well as the perspective”, predicts Filipe Silva, director of investments at Banco Carregosa, in statements to Lusa.
The analyst highlights the recovery of the Portuguese economy, mainly the result of the recovery of tourism, as well as “all the business dynamics that it entails to adapt to the demanding changes that the pandemic and the war have imposed on businessmen.”
“Inflation and the increase in interest rates may put some obstacles to the good performance of the economy, however, we believe that Portugal will be able to maintain the current dynamics and even grow less, it will continue the positive trajectory that it has shown in the post-pandemic”, Add.
Filipe Garcia, president of IMF — Informação de Mercados Financeiros, also sees no reason to change the rating or outlook at this stage.
There are worrying signs for the future, such as the foreseeable economic slowdown and the rise in interest rates, but the country’s budgetary position is robust this year and the foreseeable trajectory of the debt/Gross Domestic Product (GDP) is favorable”, he justifies . , and added that the financial rating agencies will continue “attentive to fiscal performance, the trajectory of the debt ratio, the evolution of the economy, interest rates and political stability.”
The unchanged assessment is also expected by XTB’s Henrique Tomé, recalling that economic conditions on a global scale continue to show signs of deterioration.
“Although the economic indicators in Portugal still do not show clear signs of deterioration”, he says, adding that, however, the ‘yields’ at 10 years in Portugal “are well above the European average and that of the great powers, which which also points to the risk that the most indebted economies face increases in interest rates and also deterioration of economic conditions”.
In February, DBRS justified the improved outlook for Portugal with the country’s credit vulnerabilities linked to the pandemic appearing “to be receding, while the macroeconomic outlook is improving.”
In the report, the agency noted that, despite the sharp impact caused by the pandemic, which caused a recession of 8.4% in 2020, the Portuguese economy managed to recover last year.
He further explained that the Portugal’s rating could be revised up if the country’s macroeconomic performance continues to improve and the weight of public debt returns to a downward trend.
On the other hand, it warns, the outlook could be revised down to ‘stable’ if growth prospects deteriorate “significantly” and it could downgrade the rating if political commitment to sustainable macroeconomic policies declines, with an impact on public finances.
The second agency to evaluate Portugal in the second half of the year should be Standard & Poor’s on September 9.
The rating is an assessment attributed by the financial rating agencies, with a great impact on the financing of countries and companies, since it evaluates the credit risk.
The calendars of the rating agencies are, however, merely indicative, with the option of not commenting on the scheduled dates or proceeding with an unforeseen evaluation.
Source: Observadora
