Brussels, 17/01/2014 (Agence Europe) - Standard and Poor's rating agency decided on Friday 17 January to postpone any downgrade of Portugal in the near future.
S&P says the Portuguese government is determined to cut the public deficit and is therefore keeping Portugal's long-term debt rating at BB with negative prospects, adding that this means that a downgrade remains possible in the medium term, particularly if tensions in the coalition government intensify or if budget measures are again deemed unconstitutional in the Portuguese courts.
In mid-September 2013, when it put Portugal under surveillance, S&P said there was a fifty-fifty chance it would downgrade the country. It decided against that in the end because it feels Portugal will meet its public accounts deficit reduction target of 5.5% of GDP in 2013. It is also expected to meet its target for reducing the deficit to 4% in 2014, says S&P, as better than forecast exports and stabilisation of domestic consumption, along with a slight decline in unemployment, should help the country meet its budget targets for 2014.
Portugal hopes to exit its bailout programme in May 2014, as scheduled, and on Wednesday it raised €1.25 billion in three and twelve-month treasury bonds at a sharply lower rate, a week after making a similar successful emission of five-year bonds. (SP/transl.fl)