EthiFinance Ratings affirms Portugal "BBB+" rating for its fast economic recovery

EthiFinance Ratings has affirmed the BBB+ rating with a stable trend to the Republic of Portugal. The rating agency's assessment reflects the country's rapid economic recovery seen in 2021 and 2022, which in 2023 has persisted at a more moderate pace.

The rating also considers the positive impact of the NGEU Funds on medium-term growth potential, although it highlights the need to address public debt, which still remains at high levels.

Similarly, it highlights that the Portuguese economy has strengthened its post-COVID-19 recovery, with a +6.9% y-o-y growth in 2022 and reaching pre-pandemic GDP levels. Furthermore, it notes that despite a robust start to the year in 2023, domestic demand and tourism experienced a slowdown in the second and third quarters due to inflation, tighter financing conditions, and weakness in the economies of its major trading partners.