WASHINGTON: Moody's raised its rating outlook for Portugal to stable from negative Friday, citing the government's improved finances and the declining risk of a debt restructuring.
The move removed the threat of a possible near-term downgrade to Portugal's Ba3 sovereign rating, and came after the troika of bailout lenders to the country -- the International Monetary Fund, the European Union and the European Central Bank -- approved the country's reform progress after a performance review.
Moody's cited the "improving trend in Portugal's fiscal position and the government's commitment to fiscal consolidation, as confirmed in the recently presented 2014 budget."
It also noted a slowly improving economic outlook for the short and medium term, with exports growing and unemployment falling.
Thirdly, Moody's said the improvement in the government's liquidity meant it was less likely to have to restructure its debt, and more likely to receive fresh financial support from the European Stability Mechanism when the current bailout program ends next June.
"While Portugal's borrowing requirements will be relatively large in 2014 and even more so in 2015, Moody's expects the government's market access to be supported by the availability of further official funding, if needed," it said.
Earlier Friday the IMF released to Lisbon 1.91 billion euros ($2.55 billion), the newest installment in its part of the troika's rescue program.
Comments
Comments are closed.