Fitch Ratings raised Portugal’s long-term foreign-currency Issuer Default Rating from “A” to “A+” on Friday, with a stable outlook — the country’s highest grade from Fitch since March 2011. The agency said the upgrade “reflects the strengthening of Portugal’s public finances, including a projected trajectory of public debt reduction and budget balances considerably stronger than those of its peers, supported by a strong political commitment to budgetary prudence.” Portugal’s Ministry of Finance said the new grade puts the country on a par with France and Belgium.
Fitch pointed to governance indicators above the median for “A”-rated sovereigns and institutional strength tied to European Union and eurozone membership, offset by still-high accumulated public and external debt. The agency expects general government debt to fall from 89.7% of GDP in 2025 to 87.0% in 2026 and 82.9% in 2028, with GDP growth of 2.1% in 2026 after 1.9% in 2025. It also flagged a risk to watch: house prices were around 99% above their fourth-quarter-2019 level in the first quarter of 2026, compared with 31% across the eurozone — though it said tighter macroprudential lending standards and a sound banking sector should help contain the fallout.
The move follows Standard & Poor’s decision in August to confirm Portugal’s unsolicited “A+/A-1” ratings with a positive outlook, and Morningstar DBRS’s confirmation in July 2025 of an “A (high)” rating with a stable outlook. Even after the projected decline, Fitch expects Portugal’s debt ratio to stay above the forecast median of 59.5% of GDP for “A”-rated countries.
Fitch projects the average budget deficit will narrow to around 0.4% of GDP in 2027-2028 as primary surpluses continue. Portuguese President António José Seguro called the upgrade “excellent news” that would “improve financing conditions for the State, companies and families, support investment and job creation,” predicting that, looked back on, 2026 would be remembered for one of its “most relevant economic news stories.” Finance Minister Joaquim Miranda Sarmento described it as “another great victory for Portugal,” while stressing that the pace of debt reduction “cannot be interrupted.”
References
Portugal Resident – Fitch raises Portugal’s rating to A+ with stable outlook / Euronews – Fitch upgrades Portugal’s rating to A+ and says outlook is “stable” / Yahoo Finance – Fitch upgrades Portugal’s rating to A+ and says outlook is “stable”
