Portugal’s rating outlook was upgraded to positive from stable as the economic recovery is expected to broaden in 2015-17. Meanwhile, Finland’s sovereign rating outlook was downgraded to negative.
Standard & Poor’s Ratings Services said the revision reflects the view of gradual recovery of Portugal’s growth prospects, alongside policymakers’ commitment to consolidating public finances over the medium term. The sovereign ratings were affirmed at ‘BB/B.’
The positive outlook reflects the possibility that the agency could raise the long-term rating on Portugal within the next 12 months.
According to S&P, renewed external and domestic demand and slowly increasing inflation, should support budgetary consolidation process. It expects the net general government debt to drop to 113 percent of GDP in 2018, from 118 percent in 2014.
S&P raised the sovereign ratings on Hungary to ‘BB+’ and the outlook was stable. The reduction in Hungary’s vulnerability to potential external shocks was cited as the factor that contributed to the rating upgrade.
The recent policy adjustments benefited the sovereign’s monetary policy flexibility and reduced the risk of future balance sheet recessions, the agency said.
Fitch Ratings downgraded the outlook on Finland’s coveted ‘AAA’ ratings to negative from stable. Prospects for economic growth were weak and it expects GDP growth to be at 0.5 percent this year. The general government deficit is forecast to remain at 2.7 percent of GDP this year.
At the same time, net external debt has increased since the global financial crisis to 34.7 percent in 2014, almost double the ‘AAA’ median of 18.2 percent.
Fitch affirmed the sovereign rating of Turkey at ‘BBB-‘ with stable outlook. The agency said falling oil prices contributed to lower inflation and a faster contraction of the current account deficit. Further, public finances remain robust with no sign of fiscal slippage ahead of the general election in June.
The material has been provided by InstaForex Company – www.instaforex.com