The credit rating agency Moody’s announced that it increased the prospects of sovereign debt of Portugal, from negative to stable and shows an improvement in the fiscal position and economic outlook. According to Moody’s debt of Portugal, which is approaching 130% of GDP will start to decline, slowly, from 2014, however, the rating agency continues to maintain its assessment of the country’s rank Ba3, which representing the category of states with risky investments.
The Moody’s believes that the economic outlook is improving in the short and medium term, mainly due to the dynamics of exports and lowering the unemployment rate. The structural reforms undertaken by Portugal at the troika will help to support economic growth in the medium term, according to the international firm.
After more than two years of recession, Portugal has returned to growth in the second quarter and expects GDP growth of 0.8% next year. The unemployment rate fell for the second consecutive quarter, falling to 15.6%, as the economy shows signs of recovery. This is the lowest unemployment rate since the second quarter of 2012. Yields on five year Portuguese bonds have also been reduced to 4.88% from the high in 2013 of 7.66% on July 12.
In this context, the agency Moody ‘s considers that the risk of restructuring the country’s debt receding and that Portugal could gain access to markets for direct funding in June 2014, to the end of the program of international assistance.
By Nicole P.