WASHINGTON: Moody’s has raised the debt rating of Portugal one notch to Ba1 and said it had a stable outlook, despite troubles at a major banking group. Moody’s cited the Portuguese government’s comfortable liquidity position, with regained access to the public debt markets and sizeable cash buffers as a factor in making the upgrade. The rating firm said it expected that the country’s fiscal consolidation would remain on track despite unfavorable rulings by Portugal’s constitutional court. “The first driver behind the upgrade is Moody’s view of the government’s strong commitment to fiscal consolidation, despite repeated setbacks stemming from the adverse rulings of the country’s constitutional court.” In May, Portugal’s constitutional court rejected austerity measures included in Lisbon’s 2014 budget as part of the center-right government’s ongoing cutbacks, as it hopes to reduce its deficit to four percent of gross domestic product.
Published in The Express Tribune, July 27th, 2014.
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