Ratings agency Fitch has upgraded Portugal's sovereign debt rating to A+ with a stable outlook, citing strengthened public finances and fiscal prudence.
Key facts
- •Portugal's sovereign debt rating was upgraded to A+ by Fitch, the first time it has reached this level since March 2011.
- •Fitch projects public debt will drop to 82.9% of GDP by 2028.
- •The agency expects the budget surplus to shrink from 0.7% of GDP in 2025 to 0.1% in 2026.
- •Residential property prices in Portugal rose 99% between late 2019 and early 2026.
- •Finance Minister Joaquim Miranda Sarmento stated that the debt reduction is the result of efforts by families and businesses.
Fitch Ratings has upgraded Portugal's sovereign debt rating from A to A+, assigning the country a stable outlook. The agency cited the strengthening of Portugal's public finances, specifically a projected decline in public debt and budget balances that are stronger than those of comparable countries. This move reflects a continued commitment to fiscal prudence and follows similar positive assessments from other ratings agencies.
By the numbers
Economic Outlook and Debt Reduction
Fitch expects Portugal's public debt to fall from 89.7% of GDP in 2025 to 87.0% in 2026, with a further decline to 82.9% by 2028. While the agency notes that these levels remain above the 59.5% median for A-rated countries, it highlights that persistent current-account surpluses and budgetary discipline have improved the economy's resilience to shocks. The agency forecasts a budget surplus of 0.7% of GDP in 2025, which is expected to decrease to 0.1% in 2026 due to increased spending on wages, pensions, and reconstruction efforts.
Structural Challenges and Risks
Despite the upgrade, Fitch identifies several long-term pressures, including demographic aging and potential increases in defense spending to meet NATO targets by 2035. The housing market also remains a point of concern; residential property prices in the first quarter of 2026 were approximately 99% higher than in the fourth quarter of 2019. However, the agency notes that a solid banking sector and structural demand factors help mitigate immediate macro-financial risks.
Timeline
- March 2011The last time Portugal held an A+ rating prior to the current upgrade.
- July 2025Morningstar DBRS confirmed Portugal's rating at A (high) with a stable outlook.
- August 2025Standard & Poor's confirmed its A+/A-1 sovereign credit ratings for Portugal.
- FridayFitch Ratings announced the upgrade of Portugal's sovereign debt rating to A+.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by Euronews Business.
