S&P's degrades Portugal's credit rating

16:36, April 28, 2010      

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The ratings agency Standard & Poor's (S&P's) lowered Portugal's credit quality by two levels from A+ to A-, increasing pressure on the country's financial market.

According to S&P's, the Portuguese government could have problems reducing its high deficit, which soared to 9.4 percent of the gross domestic product (GDP) in 2009 from 2.7 percent in 2008.

S&P's estimated that the Portuguese economy will stagnate in 2010, with a growth rate of about 1 percent till 2012.

Portugal "will have to fight to establish its public debt, facing many years of weak economic growth, stopped by the public debts, the low production, a labor market with less flexibility and old population," S&P's said in its report.

Portugal's economic growth will continue to be weak due to production reduction, investment stagnation and drop of domestic credit, when taking into account the high debt level of the private sector, the report added.

Portuguese Finance Minister Fernando Teixeira dos Santos said Portugal is ready to launch necessary measures, without increasing taxes for the moment, but reducing the public expense and the burden of the state.

Source: Xinhua


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