Fitch Ratings raised its outlook on Portugal to positive from stable, citing the expected continued decline in the country's public debt.

As part of the ratings action, Fitch affirmed Portugal's long-term foreign- and local-currency issuer default ratings of BBB.

The rating agency projected Portugal's general government debt to fall to 118% of GDP in 2019 from 121.5% at end-2018, before dropping further to 115% in 2020 and 104% by 2023.

"Risks to Fitch's debt projections are balanced and the debt trajectory is robust to most individual shocks," the debt watcher said.

Fitch said it was not expecting parliamentary election results in October to lead to a significant change in Portugal's current fiscal policy settings.

On Portugal's economy, Fitch said growth was expected to slow further to 1.7% and 1.5% in 2019 and 2020, respectively, from 2.1% in 2018, mainly due to a weaker growth outlook for the wider eurozone.