Bankinter | The rating agency Fitch has upgraded Portugal’s rating from ‘A-’ to “A”, with a ‘stable’ outlook, highlighting fiscal consolidation, strong debt reduction and improvements in the external position. Fitch noted that public debt fell from 134.1% of GDP in 2020 to 96.4% in the first quarter of 2025, while public accounts continue to stand out with a projected surplus in 2025 (0.1% of GDP) and moderate deficits in 2026-2027. On the external front, Portugal continues a clear deleveraging process, while the economy shows resilience. Fitch forecasts GDP growth of 1.8% in 2025 and 2.2% in 2026, above the eurozone average, thanks to consumption, tax cuts, PRR investment and a lower interest rate environment, moderating to 1.7% in 2027.
Bankinter analysis team’s view: Following S&P’s upgrade on 29 August, Fitch’s upgrade confirms Portugal’s progress in debt reduction, fiscal discipline and external strength. However, the country continues to have a high level of debt compared to its peers and remains exposed to external risks, such as the economic slowdown of its main European partners, trade tensions with the United States and geopolitical and energy uncertainty.
