DBRS pronounces today on Portugal’s rating. What is expected?


DBRS, which currently rates the Portuguese sovereign debt at ‘A’ (low) with a stable outlook, is scheduled to issue an opinion on Portugal this Friday.

The first assessment of this year’s sovereign debt, scheduled for this Friday by DBRS, should result in the maintenance of the current rating, after Portugal has recorded three rating upgrades in 2022, according to analysts consulted by Lusa.

DBRS, which currently rates the Portuguese sovereign debt at ‘A’ (low), with a stable outlook, is expected to rule on Portugal this Friday.

However, analysts consulted by Lusa believe that the assessment should remain unchanged.

Filipe Silva, investment director at Banco Carregosa, points out that “the Portuguese economy has shown resilience and a good performance, which allowed the government to overcome some budget targets.

However, he indicates that the strong rise in interest rates has already begun to be reflected in debt issues made this year and “companies and individuals feel this increase by seeing the financial charges of the loans held rising, a factor that should weigh when making a new investment, in the case of companies, or in the purchase of goods by consumers, and that in the end may lead to a slowdown of the national economy.

In the same vein, Filipe Garcia, president of IMF – Financial Markets Information, believes that the current situation advises that there are no changes either in rating or outlook.

Despite highlighting that there are “positive points” such as the “confirmation of the 2022 budget execution” and Portugal’s risk premium has decreased compared to the last time DBRS looked at the Portuguese sovereign debt, the cost of debt has worsened.

At the same time, he says, “the uncertainty about the economy” and “the set of successive cases in Portugal”.

The second agency to issue an opinion on Portugal will be S&P, on March 10, after the US agency upgraded Portugal’s rating last year to ‘BBB+’, with a stable outlook.

The rating is an evaluation assigned by financial rating agencies, with great impact on the financing of countries and companies, since it assesses the credit risk.

The rating agencies’ schedules are, however, merely indicative and they may choose not to issue an opinion on the scheduled dates or proceed with an unscheduled assessment.