Portugal's credit rating has been downgraded to junk status by Fitch agency amid the country's rising debt and increasing challenges for the government to implement austerity measures.
The Fitch rating agency on Thursday cut Portugal sovereign credit rating to BB+ from triple B minus , and maintained a negative outlook, which means further cuts is possible.
"The country's large fiscal imbalances, high indebtedness across all sectors, and adverse macroeconomic outlook mean the sovereign's credit profile is no longer consistent with an investment-grade rating," Wall Street Journal quoted Fitch as saying.
The agency also lowered its 2012 growth forecast for Portugal, saying Europe economic crisis will play a role in the expected contraction of Portugal's gross domestic product, which is seen down 3%.
"The recession makes the government's deficit-reduction plan much more challenging and will negatively impact bank asset quality," Fitch said.
Moody's Investors Service also cut the country to junk in July this year. Standard and Poor's Corp. affirmed Portugal's investment-grade rating in October.
The downgrade of Portugal came after the dramatic deterioration of the euro zone crisis which now pressures even the eurozone's two biggest economies, Germany and France.
A German bond auction failed to raise the target amount on Wednesday, while earlier France was warned again by Moody's rating agency that it may lose its cherished triple A credit rating.
Europe plunged into a financial crisis in early 2010. Insolvency now threatens heavily debt-ridden countries such as Greece, Portugal, Italy, Ireland and Spain.
2011-11-25 10:46 编辑：juliatt