S&P Global Ratings raised Portugal's sovereign credit ratings on March 15, citing the country's declining debt and balanced growth. Both trends are expected to continue over the next few years.

The rating agency upgraded the country's unsolicited foreign and local currency long- and short-term sovereign credit ratings to BBB/A-2 from BBB-/A-3, with a stable outlook.

S&P Ratings projected Portugal's net general government debt to drop to 99% of GDP in 2022, from an estimated 111% at the end of 2018.

Portugal is also expected to continue running budgetary surpluses over the next three years, maintaining the "firm downward path" of its public debt as a percentage of GDP, S&P Global Ratings said. Portugal's debt profile has also improved, since all its government debt from the International Monetary Fund has been paid ahead of schedule as of the end of 2018, it added.

The Portuguese economy is expected to post balanced growth of between 1.5% and 1.7% through 2021. In the near term, growth will likely slow somewhat to about 1.7% in 2019, S&P Global Ratings wrote.

"Given capacity constraints in key sectors, including tourism, a cyclical slowdown [in 2019] is not without benefits," it said.

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.