Portugal news - Portugal’s credit rating was just raised to A+ by Japan’s Credit Rating Agency JCR. Here is Portugal’s economic outlook for 2025:
Portugal's sovereign risk rating was raised to A+ by Japan’s rating agency that mentions that Portugal’s economy is maintaining a “Stable” outlook.
Japan’s report, that was prepared by analysts Kiichi Sugiura and Sakura Yamamoto, underlines the fact that Portugal has a diversified economic base, has made progress in structural reforms and is registering a consistent trajectory of budgetary consolidation. The report states that these factors increase Portugal’s resilience to external shocks.
Portugal’s new credit rating is sparking appetite for public debt securities among Asian investors that will easily offset the gradual withdrawal of the European Central Bank (ECB ) from the debt market.
Here is Portugal’s economic outlook for 2025:
1 - Reduction in public debt
Portugal’s public debt fell from 97.9% of GDP in 2023 to 95.3% at the end of 2024, and the outlook is a gradual but firm decline even after budget cuts. Portugal’s primary surplus has been maintained since 2015, and the overall budget balance was slightly positive in 2024, according to the Japanese credit rating agency.
2 - Solidity of the financial system
Portugal’s financial system is becoming more stable, since the Tier 1 ratio of banks rose to 17.7% in September 2024, while the non-performing loan (NPL) rate fell to 2.6%. Portugal’s banking sector has an increase in net interest income that is strengthening the capital base of banks.
3 – High Economic growth
Portugal’s GDP growth rate records the highest increase in the EU for the fourth quarter of 2024, as a percentage change compared with the previous quarter of 2024.
Portugal’s economy has recovered steadily after the Covid-19 pandemic, continuing to grow faster than the European Union average, registering a 1.9% GDP growth in 2024, driven by domestic demand.
Portugal’s economic growth is projected to accelerate in the medium term, supported by the Recovery and Resilience Plan (RRP) and energy transition.
Portugal has a GDP per capita of over 49,000 dollars, one of the highest in the 'A' rating category, states Japan’s Credit Rating Agency report.
4 – Public accounts in line with EU regulations
Portugal has maintained public accounts in line with EU regulations despite recent elections, showing the impact of political stability on the economy. Portugal’s right-wing minority coalition government, formed after the March 2024 legislative elections, maintained firm adherence to the budgetary and economic rules of the European Union, ensuring the continuity of reforms.
Portugal’s Treasury and Public Debt Management Agency – IGCP, EPE, that is the public entity responsible for managing the treasury, financing and direct public debt of the Portuguese State, has recently intensified its efforts to diversify Portugal’s investor base following the reduction in debt purchases by the ECB. This new credit rating will allow Portugal to attract Asian funds, especially from Japan, that highlights an excellent economic outlook for 2025.