Fitch upgrades Portugal's credit rating to A+ citing debt reduction and fiscal prudence

Credit rating upgrade to A+

Credit rating agency Fitch raised Portugal's long-term issuer default ratings on Friday from A to A+ with a stable outlook. In its assessment, the agency stated that the upgrade reflects the improvement in Portugal's public finances, pointing to a projected path of public debt reduction and fiscal balances substantially stronger than peer nations. Fitch noted that while Portugal maintains legacy public and external debt that remains high, solid political commitment to fiscal prudence, persistent current account surpluses, and fiscal performance consistently above expectations have increased economic resilience and shock absorption capacity. The adjustment follows a previous rating increase in September 2025, when Fitch moved Portugal from A- to A.

Government response and European standing

The Ministry of Finance, headed by Joaquim Miranda Sarmento, stated in a note sent to news agency Lusa that the credit rating improvement places Portugal at the same rating level as France and Belgium. The ministry stated that the decision demonstrates international investor confidence in the Portuguese economy. Miranda Sarmento released a statement detailing the government's perspective:

is another great victory for Portugal, in particular, when this improvement happens in a geopolitical and economic context still marked by uncertainty and instability.

Fuel taxes and fiscal measures

Speaking in Viseu on Friday, Prime Minister Luís Montenegro addressed rising fuel prices, noting expected price increases in the coming week of €0.12 per liter for diesel and €0.10 per liter for gasoline, based on projections from fuel retailer association ANAREC. To counter these market increases, the government introduced a €0.03 discount per liter on the petroleum products tax (ISP). Montenegro rejected criticism directed at the executive, stating that the state is not collecting excess revenue from value-added tax increases and noting that total ISP discounts have reached approximately €700 million this year.

The state is not collecting a single cent more in VAT as a result of the increase in fuel prices. We are returning in an ISP discount exactly the amount corresponding to the VAT increase in terms of applying the rate to the final price. Therefore, from the fuel standpoint, the question does not even arise.

Censure motion and cabinet scrutiny

Montenegro also addressed domestic political developments, specifically a motion of censure submitted by the right-wing opposition party Chega. When questioned by reporters on Friday afternoon regarding Minister of Internal Administration Luís Neves, the prime minister deferred further remarks until the parliamentary debate scheduled for Tuesday at 15:00 in the Assembly of the Republic.

I already commented on that topic yesterday and what I can convey to you is that the next time I speak about it will be on Tuesday of next week, starting at three in the afternoon, in the Assembly of the Republic, before the representatives of the people, responding to an initiative that is legitimate on the part of an opposition party, although it makes no sense.

Hugo Soares, parliamentary leader of the Social Democratic Party (PSD), affirmed that Luís Neves will remain in the government even if he is formally named as an arguido (formal suspect) in three ongoing investigations. Soares told Observador that formal status as a suspect is not sufficient cause for dismissal from the executive, stating that a definitive legal accusation is required before making a political judgment.