Scope upgrades Portugal credit rating to A+ on falling debt and growth

Sovereign rating upgrade

Scope Ratings upgraded the sovereign credit ratings of the Republic of Portugal on Friday, 2 October 2026, lifting the country's long-term rating from A to A+. The credit rating action applies to both Portugal's long-term sovereign obligations and its senior unsecured debt. Concurrently, Scope moved the rating outlook from positive to stable. The agency confirmed the decision in a statement released on Friday evening. The upgrade establishes a higher credit baseline for Portuguese sovereign debt issuance, completing a transition that was previously tracked under a positive outlook.

Fiscal indicators and debt reduction

The agency cited the steady decline in Portugal's public debt relative to its gross domestic product (GDP) as a central reason for the upgrade. Scope explained that the falling debt-to-GDP ratio reflects good fiscal performance by the government alongside moderate interest expenditure. Contained debt servicing costs have allowed the sovereign balance sheet to strengthen without excessive budgetary pressure. In addition to fiscal consolidation, the continuous improvement of Portugal's external position formed a key element of the rating evaluation. The combination of fiscal prudence and external balance has reinforced the sovereign credit structure against macro risks.

Economic drivers and GDP growth

Resilient economic expansion served as another decisive factor behind the rating revision. Economic activity in Portugal has consistently outperformed the average of the euro area over the past several years. Scope noted that robust tourism revenue and ongoing gains in total employment have underpinned domestic performance. Furthermore, structural reforms and capital deployment under Portugal's Recovery and Resilience Plan (PRR) have provided sustained economic support across multiple sectors.

Scope detailed these contributing elements in its credit assessment:

Economic activity has consistently outperformed that of the euro area in recent years. Robust tourism and gains in total employment, along with the effects of the Recovery and Resilience Plan (PRR) and implemented reforms have contributed to solid economic performance.

In its forward-looking assessment, Scope forecasts that Portugal's real GDP growth will remain robust at 2.1% in 2026. This forecast indicates an acceleration compared to the prior year's economic growth rate. The agency maintained this expectation despite the international economic effects linked to the conflict in the Middle East. Over the longer horizon spanning 2027 through 2031, Scope projects real GDP growth to average 1.7% annually, continuing to exceed the projected euro area average.

Balanced medium-term outlook

The shift in the sovereign outlook from positive to stable indicates that risks facing Portugal's credit profile are evenly balanced over the next 12 to 18 months. Scope indicated that the 12 to 18 month outlook horizon reflects an equilibrium between external vulnerabilities and internal macroeconomic strengths. While external shocks, including regional instability in the Middle East, remain risk factors, Portugal's falling debt burden, steady job creation, and PRR-driven investments provide substantial support. As a result, the agency views the A+ rating as well-anchored for the upcoming fiscal cycles.