Moody’s financial rating agency has held Portugal’s rating at ‘A3’ with a ‘stable’ outlook.

Moody’s last evaluated Portuguese sovereign debt in November of last year, upgrading the rating from 'Baa2' to 'A3'.

The rating agency believes Portugal’s rating is bolstered by “its competitive and diversified economy, relatively high levels of wealth and high institutional strength,” and since the previous assessment, the country’s progression “has been globally consistent with the agency’s expectations.”

The agency forecasts growth in the Portuguese economy of 1.8% this year and 1.9% in 2025.

Additionally, it highlights that despite the recorded reduction, the ratio of public debt to GDP still remains high, The Portugal News reports. 

Furthermore, Portugal’s stable outlook reflects the view “that the risks to Portugal’s credit profile at the ‘A3’ rating level are balanced,” according to Moody’s.

“More positive trends in economic and fiscal strength than Moody's currently expects are offset by recent evidence of political risks,” the agency went on to say.

In addition, “the early elections in March 2024 did not result in a clear government majority and the risks of new early elections at the end of 2024 are high”.

Moreover, among the other major agencies, Standard & Poor's evaluates Portuguese sovereign debt at 'A-' with a positive outlook, Fitch at 'A-' with a 'stable' outlook, and DBRS at 'A' with a 'stable' outlook.

The next financial rating agency scheduled to comment on Portugal will be DBRS on 19th July.