For Portugal, the rating increase means that for the first time since the euro crisis forced the country to take emergency loans from the International Monetary Fund (IMF) in 2011, it has a credit rating of A level from a leading rating institute.
The rating upgrade comes after Portugal’s central bank – part of the European Central Bank (ECB) – raised its growth forecast for this year to 2.7 percent, citing a boost in tourism.
Portugal’s national debt as a share of the country’s GDP fell to 112.4 percent last year, and Fitch now expects the debt ratio to continue down to 104.3 percent of GDP this year.
The interest rate on Portugal’s ten-year government bond – which peaked at 18 percent when the euro crisis hit its worst in 2012 – is currently at around 3.60 percent.
The outlook for Portugal’s new higher credit rating is stable, according to Fitch. This means that the rating agency does not expect it to need to be adjusted again in the near future.
The other two major rating institutes, S&P Ratings and Moody’s have credit ratings BBB-plus and Baa2 respectively for Portugal, although both with a positive outlook.