Fitch upgrades Portugal to A+ with stable outlook

Fitch has upgraded Portugal’s sovereign rating to A+ from A and revised the outlook to stable from positive. The agency said the upgrade reflects “the strengthening of Portugal’s public finances”, including a projected decline in public debt and budget balances that are stronger than those of peer countries.

According to Fitch, that performance is being supported by “a strong political commitment to fiscal prudence”. The agency also raised its GDP growth forecast for Portugal to 2.1% for 2026, from 2% previously, and now expects growth of 1.9% in both 2027 and 2028.

Fitch also improved its fiscal projections. After forecasting a deficit of 0.8% of GDP in March, it now expects a budget surplus of 0.1% in 2026, following a surplus of 0.7% in 2025. It said emergency support and reconstruction spending linked to storms, as well as tax and housing relief measures, had been partly offset by higher social security contributions from continued employment growth and a large dividend distribution from Caixa Geral de Depósitos (CGD).

The agency expects Portugal’s public debt ratio to fall to 87% of GDP in 2026 and 82.9% in 2028, supported by continued primary surpluses and moderate nominal growth. Fitch also warned that rapid house price growth could increase housing market vulnerabilities and affordability pressures, although it said tighter macroprudential lending standards and a solid banking sector should help contain financial risks.

Finance Minister celebrates: “Another great victory for Portugal”

The Ministry of Finance emphasised last Friday that Fitch’s upgrade of Portugal’s rating from A to A+ – the second such upgrade by the credit rating agency since April 2024 – “demonstrates the international investors’ confidence in the Portuguese economy”.

“If we take into account the upgrades carried out by S&P (one in February 2025 from A- to A and another in August 2025 from A to A+), this is now the fourth rating revision the country has seen in the last two years”, the ministry noted. It also emphasises that Portugal now has the same rating as France, Belgium, Estonia, Lithuania, Slovenia and Malta – and that “only six countries in the Eurozone currently have a higher rating”.

According to the Minister of State and Finance, Joaquim Miranda Sarmento, quoted in a press release sent to newsrooms this evening, this rating upgrade “is yet another major victory for Portugal, particularly as this improvement comes against a geopolitical and economic backdrop still marked by uncertainty and instability”.

“The Government is committed to maintaining this course: a balanced budget and a reduction in public debt, whilst simultaneously adopting reforms and measures that boost the productivity and competitiveness of the Portuguese economy, thereby enabling higher exports and economic growth”, the ministry added.

Originally published at Eco.pt