Moody’s Investors Service upgraded the outlook to positive from stable on Portugal’s sovereign ratings.
The agency cited improving resilience of Portugal’s economic growth, ongoing fiscal improvements and strengthening government debt structure as reasons for the latest action.
The agency expects a marked pick-up in economic growth to 2.5 percent in 2017. The agency also forecasts investment activity to remain buoyant and continue to contribute to growth over the forecast horizon.
Further, Moody’s observed that Portugal’s fiscal consolidation efforts exceeded expectations in 2016, resulting in a decline in the budget deficit to 2 percent of GDP, from 4.4 percent in 2015. The budget deficit is expected to remain below 3 percent in coming years.
According to Moody’s, active debt management policies have helped increase the resilience of Portuguese state debt to market developments, including from a gradual increase in interest rates.
Source: RTT News