New York, N, United States (4E) – Fitch ratings agency said on Friday that it upgraded its “positive” outlook on Portugal and kept the BB+ credit rating on the country.
Fitch’s decision was based on Lisbon’s budgetary efforts and the overall recovery in the economy three years after its bailout.
The economy is emerging strongly from its debt bailout and regaining investor confidence in March by surpassing its budget target by a huge margin.
Portugal, which is still struggling to recover for the debt crisis, is trying to emerge from recession at the same time overcome public anger for the government’s tough austerity measures. Last year, the country posted a budget overshoot that is equivalent to 4.9 percent of output.
Fitch predicts the Portuguese economy to expand by 1.3 percent in 2014 and 1.5 percent in the following year.
The economy pulled out of recession in the second half of 2013 to post a 1.1 percent growth, helping public finances improve as growth increases tax revenue and reduces spending.
The International Monetary Fund and the European Union rescued Portugal in May 2011 by giving loans amounting to 78bn euros on condition that the government implement structural reforms to increase the economy’s efficiency and improve public finances.