The agency points out that Portugal’s biggest constraints are related to debt - which currently stands at over 130 percent of Gross Domestic Product (GDP) and makes the country vulnerable to fluctuations in market confidence - and to the budget deficit.
However, it notes that the government is “proactive” about debt management and is capable of taking control of related risks, and that forecasts included in the 2018 State Budget are “comfortable.”
Fiscal consolidation efforts have also been “extremely vigorous,” ARC Ratings added in its statement.