Standard & Poor’s, the world’s ‘big cheese’ among ratings agencies which relegated Portugal to a toxic rating on a truly fateful Friday 13, in 2012, yesterday removed the stigma, rating the country’s public debt on the limits of investment level.
It was a decision that came “totally out of the blue” and which is expected to see “strong reaction in the markets on Monday”.
It means that for the first time in years Canadian ratings agency DBRS is not the only one in the so-called ‘big four’ that stands between Portugal and what otherwise would have been a very hard place indeed.
Welcoming the news, Opposition leader Pedro Passos Coelho has said it should have come sooner.
In typical punchy style, prime minister António Costa retorted: “If the government had changed sooner, we would have left (“rubbish”) sooner”.
António Saraiva, the president of Portugal’s confederation of businesses said S&P’s decision will increase the country’s competitivity, “marking a new cycle of development”.
Explains Diário de Notícias, the basis for the decision is the country’s “strong economic and budgetary performance”.
S&P has increased its estimate for average growth in the economy from 1.5% to 2%, says DN, while other reports say the agency expects growth this year of 2.8%, with 2.3% in 2018.
But whatever lies in store, analysts are purportedly “alerting against euphoria”.
The bottom line, as always, is that budgetary consolidation efforts have to continue, and the country’s ever-increasing public debt needs to come down.
