Just as Bloomberg predicted back in September, ratings agency Fitch has joined its ‘buddy’ Standard & Poors and revised Portugal’s investment grade status – rated for years at the ‘rubbish’ level – upwards.
Reporting late on Friday, Fitch raised the bar two levels from BB+ to BBB, giving a “stable outlook”.
It is exactly the Christmas present the country needed.
Prime minister António Costa made the mistake of saying 2017 had been a “tasty year” for Portugal: this was taken out of context and saw him pilloried for using such a term in a year when over 110 people died in raging wildfires.
As he explained afterwards, he was talking about the nation’s economic advances, which have been nothing short of remarkable.
Nonetheless, President Marcelo stressed that while this is “an hour of joy” for the country, rigour must continue: the issue of public debt, which only a few months ago reached the highest ever total of over 250 billion euros, “has to be resolved”, though now at last it may happen with “less sacrifices by the Portuguese” through 2018.
The slow rise from the toxic ashes of negative ratings “will see the future improving for everyone”, Marcelo continued, as it will reduce the cost of public debt and in this way allow the country to reduce debt totals so that it can “reach the end of the year with less debt”.
With Fitch’s revised rating now joining that of S&P and DBRS, the only ‘big’ agency left to bring Portugal’s investment grade out of the woods is Moody’s which has it still pegged at “speculative” (Ba1), though with a ‘positive’ perspective.