The agency’s decision Fitch improve the prospects associated with the classification of the Portuguese Republic “anticipates”, the Government states, “possible increases in classification from Portugal”which, in theory, will contribute to reducing financing costs in the debt market.
In addition to Fitch, Portuguese debt also recently received favourable comments from another agency, Scope. However, Fitch’s comments have more important implications, as it is one of the world’s leading financial rating agencies and one of the four recognised by the ECB.
“In its analysis, Fitch highlights the continued progress in reducing public debt, the commitment to a prudent budgetary policy and the continuation of the external deleveraging process,” the Ministry of Finance said in a statement issued on Sunday. “The agency also highlights the resilience of the labor market, the increase in disposable income and investment, as factors that will contribute to the growth of the economy,” the statement added.
For the Government, this decision, which is announced in the midst of negotiations on the next General State Budget, “demonstrates confidence in the evolution of the Portuguese economy and a recognition of the work being carried out by the Executive to guarantee the balance of public accounts and the sustained reduction of public debt.”
As the Government has argued, it is possible to adopt measures on the income and expenditure side, while maintaining budget surpluses. The economic and budgetary forecasts of several international institutions are in line with those of the Government, predicting budget surpluses for the coming years,” the Ministry of Finance states.
The Fitch agency decided to maintain the classification Portugal’s ratings remained unchanged at A-, but revised the outlook upwards to “positive”,
Source: Observadora
