Portugal’s budget results should lead to the financial rating agency Moody’s raising Portugal’s ‘rating’ on Friday, according to analysts consulted by Lusa.
Moody’s, which currently rates Portugal’s rating at ‘Baa2’, with a stable outlook, has scheduled a review of Portugal’s sovereign debt for Friday.
Analysts polled by Lusa expect an improvement in Portugal’s rating, mainly due to the downward trend in the government debt-to-GDP ratio.
“Taking into account the recent upward revisions to this year’s growth and downward revisions to the budget deficit and debt, Moody’s can upgrade its debt rating from ‘Baa2’ to ‘Baa1’,” said Filipe Garcia, president of the IMF. Markets Information.
However, the analyst emphasizes: “Against this possibility, I consider recent political instability and the fact that both interest rates and the ‘spread vs benchmark’ are above the levels observed in September 2021, when Moody’s previous rating rose” .
However, he believes that “the fact that debt ratio projections show a downward trend could be enough to warrant a rating upgrade”.
Filipe Garcia, Director of Investments at Banco Carregosa, also expects an improvement in the Portuguese debt rating and emphasizes that “Portugal continues to experience a good moment in its economy”.
“Despite higher inflation and interest rates, the economy has managed to show its resilience, with several sectors experiencing a very strong recovery. Our debt-to-GDP ratio is declining, a trend that is expected to continue,” sums up.
For the Banco Carregosa analyst, “these factors have contributed to Portugal being the country with the lowest spread relative to Germany, 79.18 basis points, among the countries in the periphery”.
“In the long run, we could see a slowdown in the economy, due to a possible slowdown in consumption, which the high rates could cause, but they should not be enough to push the economy into recession,” he added. .
Moody’s chose not to comment on Portugal last year, its latest assessment dated September 17, 2021, when it put the rating at “Baa2”, with a stable outlook.
In the second semester, DBRS will be the first to give its opinion on July 21.
The ‘rating’ is a rating assigned by the financial rating agencies, with a major impact on the financing of countries and companies, as it assesses credit risk.
However, the calendars of the rating agencies are purely indicative, the latter may choose not to express an opinion on the dates provided or to proceed with an unplanned evaluation.
Source: DN
