(Reuters) -Global ratings agency S&P upgraded Portugal’s rating to “A+” from “A” on Friday, citing expectations of further external financial deleveraging as a key driver behind the upgrade.
Despite heightened global and trade uncertainty, Portugal is set to post moderate growth and continues to enhance its external financing, the agency said.
Portugal’s economy rebounded in the second quarter, helped by private consumption and exports, including a 0.2% rise in services in the key tourism sector, reversing a 0.4% decline in the previous quarter.
The credit agency expects Portugal to remain largely unaffected by the EU-U.S. trade deal, with its strong tourism sector helping to offset broader euro zone tariff impacts and supporting financial deleveraging.
The National Statistics Institute earlier on Friday said that Portugal’s gross domestic product grew 0.6% in the second quarter from the previous three months, when the economy contracted by 0.4%.
Despite rising defense spending pressures and a slight economic slowdown in 2025, the ratings agency said, “Portugal’s debt as a share of GDP will continue to decline, albeit at a slower pace during 2025-2028.”
S&P expects Portugal’s economic growth will rebound in 2026, driven by accelerated private investments before stabilizing around 2027-2028.
Last month, Portugal’s government announced an investment plan worth 4 billion euros ($4.68 billion) to expand and modernise its main ports over the next decade, with 75% of funding expected from private companies.
The agency also revised Portugal’s outlook to “stable” from “positive”.
($1 = 0.8542 euros)
(Reporting by Sruthi Narasimha Chari in Bengaluru and Sergio Gonçalves; Editing by Mohammed Safi Shamsi)
