Financial rating agency DBRS on Friday raised its rating of Portugal’s sovereign debt from “BBB” (high) to “A” (low) and changed the trend from “positive” to “stable,” according to a note published by the Canadian bureau.
Finance Minister Fernando Medina said in a statement sent to the editors that “11 years later Portugal once again considers its public debt as a quality investment by A-rated groups”. “This is a milestone for the public debt assessment in the eyes of investors and another important sign of international confidence in Portugal,” the official continued, adding that “the positive effects on sovereign debt interest rates will be reflected in the interest that is also borne by businesses and households”.
Fernando Medina also mentions that “Portugal will remain committed to a strategy of clear accounts, translated into a clear reduction of public debt that Portugal aims to protect against global uncertainty, and to promote the growth potential of our economy”.
Thus, according to the Ministry of Finance, “DBRS is the first rating agency to place Portuguese debt risk at A levels, six months after the outlook improved to “positive”.
“At a time of great global uncertainty, the decision underlines the international confidence that Portugal continues to gain with the government’s financial strategy for managing public accounts,” the guardianship continues.
The guardianship explains that DBRS made this decision to increase the rating of the Portuguese debt due to “budget and policy management, noting that the fiscal deterioration of 2020 was due to the impact of the covid-19 pandemic and that As the deficit decreased rapidly in 2021, the budget execution so far this year is in line with 2019’s.”
“The rating agency also underlines the advantage of the country benefiting from a framework of strong political stability, as well as its commitment to the rules of economic governance of the European Union,” the ministry added.
“DBRS also justifies the decision with the evolution of debt and liquidity and points to the faster than expected improvement in the financial position of the Republic,” reports an official source from the office of the Minister of Finance.
The financial rating agency “recognizes that interest charges have fallen in recent years as the financing profile with long average maturities reduces the risk associated with a context of more restrictive financing conditions,” the statement concludes.
The rating is a rating assigned by the financial rating agencies, which has a major impact on the financing of countries and companies as it assesses credit risk.
Salomé Pinto is a journalist for Dinheiro Vivo
Source: DN
