KBRA Affirms A/K1 Ratings for Portuguese Republic; Outlook Stable
7 Feb 2025 | Dublin
KBRA Europe (KBRA) affirms the long-term issuer ratings of A for the Portuguese Republic. KBRA also affirms the short-term ratings of K1. The Outlook on the long-term ratings is Stable.
| This credit rating is an unsolicited credit rating. | |
|---|---|
| With Rated Entity or Related Third-Party Participation | Yes |
| With Access to Internal Documents | Yes |
| With Access to Management | Yes |
KBRA’s affirmation of Portugal’s ratings reflects the country's significant fiscal consolidation, strong economic growth, enhanced resilience to shocks, and reduced macroeconomic imbalances. While the government has made substantial progress in strengthening public finances, they are now well-positioned for stability and sustainability, with a steady short-term outlook. Stronger economic fundamentals, coupled with public investment, indicate that sustained growth is achievable in the medium term, further supporting debt consolidation. KBRA acknowledges increased political fragility but considers it unlikely to disrupt the disbursement of the European Union’s Recovery and Resilience Facility. The Portuguese banking sector has become more resilient over time, with notable improvements in asset quality. These factors collectively support the Stable Outlook.
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