Country Risk Service Portugal 3rd Quarter Updater

  • ID: 4622225
  • Country Profile
  • Region: Portugal
  • 18 Pages
  • The Economist Intelligence Unit
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Portugal successfully exited its EU/IMF assistance programme in 2014, and since 2017 the economy has performed strongly. Improved economic conditions and fiscal performance led to an upgrade in The Economist Intelligence Unit's August 2017 ratings report, to BBB. Borrowing costs will rise moderately in 2019, however, after the European Central Bank's asset-purchasing programme is phased out. Public debt remains high, at 125.7% of GDP at end-2017.

The score stands at 27 and the rating remains at A. A better economic and institutional outlook for the euro zone has increased its resilience to political risk and external shocks, and structural support for the currency comes from a large regional current-account surplus. We expect the euro to average US$1.19:EUR1 in 2018-19, after averaging US$1.13:EUR1 in 2017.

Years of mismanagement culminated in a series of state interventions-the break-up of Banco Espírito Santo into a "good bank" and "bad bank" in 2014, the resolution of Banif in 2015 and the recapitalisation of the country's largest bank, Caixa Geral de Depósitos (CGD), in 2017. Legacy problems persist, and the sector faces weak profitability and high levels of non-performing loans.
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Country Risk Service Portugal 3rd Quarter Updater

Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk

Definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk

Central scenario for 2018-22: Political stability

Central scenario for 2018-22: Election watch

Central scenario for 2018-22: International relations

Central scenario for 2018-22: Policy trends

Central scenario for 2018-22: Fiscal policy

Central scenario for 2018-22: Monetary policy

Central scenario for 2018-22: Economic growth

Central scenario for 2018-22: Inflation

Central scenario for 2018-22: Exchange rates

Central scenario for 2018-22: External sector

Key risk indicators

Ratings summary

Quarterly indicators

International assumptions summary

Economic structure

Public finances

Exchange rates, interest rates and prices

Financial sector

Current account

Foreign payment and liquidity indicators

External trade
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