Lisbon, March 12, 2025 (Lusa) - Standard & Poor's (S&P) said on Wednesday that the likely early elections in May will not interfere with the downward trend of Portugal's public debt, nor should they have a significant effect on Portugal's medium-term growth prospects.
In a statement sent to newsrooms today, which does not constitute an official review of Portugal's rating, the financial rating agency considers that "despite political uncertainty, Portugal's fiscal trajectory remains on track".
"We project that in 2025 Portugal will achieve a budget surplus for the third consecutive year," S&P points out, emphasising that the "2025 budget has already been approved, and previous episodes of political transition have not led to significant economic disruptions or budget slippage."
In addition, the agency also emphasises that "the main political milestones needed to unlock the large NextGen EU funds [relating to the Recovery and Resilience Plan] remain protected from the political cycle, as they are incorporated into the 2025 state budget and can proceed without parliamentary approval".
As for the future, after this year, S&P recognises that risks could arise if the budgetary position deteriorates, particularly if the political situation prevents the budget from being approved.
Even so, even in the scenario of another minority government, "should the 2026 budget not be approved, Portugal could continue to operate under the responsible 2025 budget, ensuring that public debt continues to fall as a percentage of GDP".
S&P has already assessed Portugal's sovereign debt rating this year, on 28 February, when it upgraded the rating from ‘A-’ to ‘A’, with a positive outlook.
The minister of finance himself, in the now caretaker government after the motion of confidence was defeated in parliament, signalled today that "the rating agencies are now looking at Portugal as a safe, stable and reliable country".
Fitch is the next rating agency to assess the sovereign debt, in a review scheduled for this Friday.
MES/AYLS // AYLS
Lusa
