Standard & Poor’s keeps its negative outlook because of potential threats from Europe, more specifically from Spain.
Ratings agency Standard & Poor’s affirmed Portugal’s BB rating, keeping its outlook negative and warning that the country’s economic situation could deteriorate further if the Spanish crisis deepens.
Spain is Portugal’s “largest trade partner and external creditor”.
S&P stressed that Spain “buys around a quarter of Portugal’s exports” therefore its situation could affect Portugal’s export dynamic which has been positive so far and is regarded as crucial to the country’s successful implementation of the bailout programme.
However, S&P also added that ”over the past 12 months, the Portuguese government seems to have been meeting the conditions attached to the EU/IMF program in a consistent manner”, highlighting the rapid shrinking of Portugal’s current account deficit.