Portugal warned of threat to rating

Discussion in 'Economics' started by ASusilovic, Jan 10, 2010.

  1. Portugal has been warned that it faces a credit rating downgrade unless the government takes firm measures to reduce its swollen budget deficit.

    “If Portugal wants to avoid a downgrade, it is going to have to take meaningful, credible steps to get the deficit under control,” said Anthony Thomas, a senior sovereign risk analyst with Moody’s credit rating agency.

    Portugal, where the budget deficit tripled to more than 8 per cent of gross domestic product last year, is among several European Union countries seeking to reassure international financial markets that they will not follow Greece into a debt crisis.

    Portugal’s budget for 2010, due to be debated in parliament this month, is seen as a crucial test for the recently re-elected socialist government to show a strong commitment to fiscal rigour.

    “This budget is very important for people like us,” said another senior rating analyst. “If the government puts forward ambitious measures to bring down the deficit, it will help take the pressure off the rating.”

    Moody’s and Fitch both placed Portugal’s sovereign debt rating on a negative outlook in the autumn, a measure that implies a probable downgrade within 12 to 18 months.

    Lifting the warning or downgrading the rating, said Mr Thomas, would depend on what steps the government took to improve the outlook for fiscal consolidation and the underlying growth rate. The economy is estimated to have contracted nearly 2.5 per cent last year after zero growth in 2008.

    In Greece, downgrades by three international rating agencies in December pushed up spreads on government bonds and left the country facing the humbling risk of an EU bail-out.

  2. This little piggy went to market, This little piggy stayed at home, This little piggy had roast beef, This little piggy had none :cool:
  3. ....will be bought out by Brazil and be renamed, East Brazil. :cool:
  4. the1


    And when the little piggy got home he discovered the market went higher.

  5. Excellent this means the markets can go up even more now. :->
  6. the1


    Brazil is too busy stealing children to worry about buying Portugal. At least this story had a happy ending...so far....


  7. My question is when does the US get down graded.

    Can't believe who gets to do the grading and when they do it.
    Timing is every thing to ensure the US Market continues to rise.