Details about Portugal

S&P: “Under our revised base case economic growth scenario, we expect the Portuguese government could struggle to stabilize its relatively high debt ratio over the outlook horizon until 2013. Portugal’s public finances in our view remain structurally weak, notwithstanding the government’s substantial public sector reforms of recent years. we expect that the Portuguese government would need to implement fiscal consolidation over and above its current plans. Portugal’s fiscal indicators, as well as its growth outlook, in our view compare unfavorably with the ‘A’ median for sovereigns. ”
– S&P “We have revised downward our growth scenario for Portugal and now expect economic activity to stagnate in 2010. ”
– We expect government debt to continue to rise rapidly, to 95% of GDP by 2013 from 66% in 2008. Fiscal imbalances and high debt rollover in our opinion leave Portugal vulnerable to changes in investor sentiment. The resulting interest rate shock or further shocks to economic growth could in our view lead to a significantly more pronounced increase in the government’s debt ratio.