Portugal’s sovereign debt upgrade by Fitch has reinforced a wider reversal in the fortunes of the five eurozone countries once grouped together as the “PIIGS” during Europe’s debt crisis.
Fitch raised Portugal’s rating from A to A+ on 5 September, its second upgrade of the country in a year. The move restored Portugal’s highest Fitch rating since 2011 and placed it alongside France and Belgium, with only six eurozone countries rated higher.
The agency cited Portugal’s falling public debt, budget surpluses and economic growth. The Portuguese Government said the latest decision was the fourth rating upgrade awarded to the country by major agencies in the past two years.
Portugal’s public debt ratio fell to 89.7 per cent of gross domestic product in 2025, according to the government, taking it below 90 per cent for the first time since 2009. Fitch expects the ratio to decline further, to 87 per cent this year and 82.9 per cent by 2028. ([portugal.gov.pt](https://portugal.gov.pt/pt/gc25/comunicacao/comunicados/fitch-sobe-rating-de-portugal-de-a-para-a?utm_source=openai))
The upgrade completes a striking turnaround for Portugal, Ireland, Italy, Greece and Spain, whose finances were at the centre of the eurozone’s sovereign debt turmoil 15 years ago. At the end of 2011, yields on their ten-year government bonds were close to 7.5 per cent, before falling after European Central Bank president Mario Draghi pledged to do “whatever it takes” to preserve the single currency.
The five countries have since pursued sharply different economic paths, but all have benefited from improved investor confidence and a series of credit-rating upgrades. Their government borrowing costs are now lower than those of France, once regarded, alongside Germany, as one of the bloc’s financial anchors.
Portugal debt upgrade highlights uneven recovery
Greece has recorded the most dramatic improvement in its credit standing, recovering between nine and 13 rating notches from its crisis-era position. Its debt ratio, which exceeded 209 per cent of GDP during the pandemic, is expected by the International Monetary Fund to fall to about 137 per cent in 2026.
Ireland’s debt ratio has fallen even further, helped by strong nominal economic growth associated with multinational investment. It has dropped from about 120 per cent of GDP in 2012 to just above 30 per cent.
Portugal’s progress has been steadier rather than as dramatic, while Spain has made gradual gains. Italy remains the outlier, constrained by weak growth and the highest debt burden in the bloc; its debt ratio has risen since 2024 and is expected to overtake Greece’s this year.
Other agencies have also signalled confidence in Portugal. Standard & Poor’s raised the country’s rating to A+ in 2025 and retains a positive outlook, while Fitch and DBRS have also maintained positive outlooks. In August, KBRA upgraded Portugal to A+ and said the decision reflected fiscal consolidation, resilient growth and a marked reduction in economic imbalances. ([kbra.com](https://www.kbra.com/publications/pRKRCkdC/kbra-upgrades-portuguese-republic-s-long-term-ratings-to-a-outlook-revised-to-stable?format=web&utm_source=openai))
The result is a profound change in the market’s view of the former PIIGS: once treated as a symbol of eurozone vulnerability, several are now being presented as examples of fiscal repair, falling debt and improving creditworthiness.
