The rating was revised in the periodic rating review, and the result was unexpected by market analysts, after the agency upgraded Portugal's rating in February.

"Despite a highly uncertain trade and geopolitical environment, Portugal is expected to post moderate surpluses and will continue to improve its external financial metrics, characterized by significant economic deleveraging," the rating agency noted.

S&P notes that "even with growing pressure on defense spending and domestic political instability, Portugal's solid budgetary trajectory places public debt on a steady downward path," which is why it decided to upgrade its sovereign credit ratings, with a stable outlook.

Regarding the 2026 State Budget, S&P believes that the government "could count on the Socialist Party's abstention to approve the 2026 budget, as it has ruled out a pact with Chega," and that "if it does not, the government could transfer the solid 2025 budget to 2026 and thus maintain budgetary discipline."

Regarding the stable outlook, it "reflects Portugal's economic resilience in the face of increased global uncertainty and the expectation of prudent fiscal policies, despite domestic political instability."

S&P forecasts that the public debt ratio should continue its downward trajectory, reaching 82% of GDP in 2028, projecting a surplus of 0.2% of GDP, below the 0.3% estimated by the government.

For the Portuguese economy, S&P estimates growth of 1.7% this year and 2.2% next year.

The Ministry of Finance responded to this decision by stating in a statement that "it is a victory for Portugal and for the path taken by the country, families, and businesses in recent years," and that it "results from the budgetary policy and the growth prospects for the economy."

The rating is an assessment assigned by financial rating agencies, with a significant impact on the financing of countries and companies, as it assesses credit risk.