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S&P revises Portugal outlook to positive on ability to service external debt

S&P Global Ratings affirmed Portugal's long- and short-term sovereign credit ratings at BBB/A-2 and revised the outlook to positive from stable, citing improvements in the country's ability to service external debt.

A supportive monetary policy stance from the European Central Bank has helped Portugal reduce the cost of servicing commercial external debt, S&P Global Ratings said. The rating agency estimates the country's net external services surplus at 10% of GDP, more than double the level in 2010.

Meanwhile, Portugal's fiscal performance has also improved, with the country's 2018 primary budget surplus of close to 3% ranking among the highest in the eurozone. The rating agency expects Portugal's primary surplus to remain close to 2018 levels through 2022, leading to a decline in the net general government debt-to-GDP ratio of 12 percentage points toward 103% of GDP by 2021-end.

The rating agency projects Portugal's real GDP growth for 2019 to stand at 1.8%, compared with 2.1% in 2018.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.