Portugal's sovereign debt rating lowered to A1

Moody's Investor Service on Tuesday cut Portugal's sovereign debt rating by two notches to A1.

Moody's, a leading global credit ratings agency, lowered Portugal's rating due to concerns over the country's rising debt and feeble economic growth prospect.

Portugal's government debt trend is likely to continue to worsen, Moody's said in a report.

The government's "debt metrics to continue to deteriorate for at least another two to three years, with the debt-to-GDP and debt-to-revenues ratios eventually approaching 90 percent and 210 percent, respectively," said the Moody's.

Moody's also said it was concerned about the economy's medium-term growth potential.

Portugal, along with Spain, was seen as the most possible eurozone member state to ask for financial aid since it is facing a Greek-style debt problem.

The Portuguese government has decided to launch a package of austerity measures to reduce the public deficit.

[Source: Xinhua, Lisbon, 13Jul10]

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