The sovereign rating of Portugal is set at BBB with stable trend
LisbonUpdated:
The Spanish rating agency Axesor has published the sovereign 'rating' of Portugal: BBB with stable trend. This is the first measurement of this type carried out by the firm in the neighboring country, which certifies "the economic recovery to pre-crisis levels, the results of the fiscal consolidation effort and the structural reforms undertaken, while reflecting the potential of domestic demand to sustain growth. "
However, the moderation of exports, the slowdown in private consumption and "the end of the accommodative monetary policy of the European Central Bank" join the high public debt as reasons that stop a higher rating for the Portuguese Republic, governed by the Socialists and who lives in October of this 2019 their next legislative elections.
Axesor proclaims: "Investments have been reactivated in the context of the Portugal 2020 Plan, although with a moderation in the growth outlook for 2019 to 1.8". THE IPC se will fix around 1.5% at the end of the year in course, while the unemployment rate will fall to 6.3%, a level unattainable for Spain because of how low it is (although salaries are much lower in the neighboring country, where the minimum wage is 600 euros).
The rating of BBB for Portugal implies that "the institutional framework is solid and guarantees with the free evolution of economic relations", but the Spanish company stresses: "A large part of the Portuguese public deficit can be explained by aid to banks, such as 3,944 million euros allocated in 2017 to the recapitalization of Caixa Geral de Depósitos ".
But the public debt will stand at 118.4% this year, an indicator that substantially improves the percentage of 130.6% in 2014, but which still arouses the distrust of Brussels.
In this sense, Axesor's report, based in Portugal since 2016, determines: "A quarter of public debt corresponds to the funds received for the financial rescue, with a current outstanding balance of 56,300 million euros ".
Precisely, the efforts of the Republic presided over by the conservative Marcelo Rebelo de Sousa allowed Lisbon to recently pay off its debt to the International Monetary Fund (IMF) by paying the last 4,700 million euros owed to the institution led by Christine Lagarde. To the point that deposited the amount before December 31, which resulted in the neighboring country could save 100 million euros in interest.
In 2017 they were able to restore the International Monetary Fund 10,000 million euros. The internal collection thanks to the increasingly high indirect taxes paves the way for these early repayments, which have made possible a joint saving of 1,160 million euros.
The Achilles heel of the public debt was placed last year at 251.1 billion euros, partly because the month of October saw the deficit of administrations rose 2,100 million euros, because of the issuance of Treasury bonds, according to confirmed the Bank of Portugal.
The duties that are pending now Portugal focus on returning the amounts still owed to the European Union, which put into play 52,000 million euros so that the bankruptcy did not appear and bring the neighboring country closer to the financial abyss in every rule. It seemed that the descending curve of Athens was going to repeat itself in Lisbon, but time has shown that the Portuguese route was not entirely misguided.
