Fitch credit rating agency have brought Portugal's credit rating down from BBB- to BB+ and with no promising outlook.
Fitch justifies its decision because of the excessive debts in all the industries and the negative macroeconomic perspectives. Also, the agency has brought the Portuguese outlook down taking into account the European outlook and it's expected to decrease about a 3% in 2012.
Fitch believes that in the next two years, recession will make the deficit reduction plan become harder to carry out and it will be negative for the quality of financial assets. Anyway, the agency thinks that the commitment of Portugal with the plan is strong.
The expectations of Fitch is that the Portuguese debt will rise until 110% in 2011 and it will arrive to the 116% in the end of 2013. This crisis is also a risk for the financial system, that is leaving money to one of the most indebted private sectors in Europe.
So, if the Portuguese investments and work go wrong, it could mean a reduction of the credit rating. In the other hand, to fulfil EU's and IMF's program would relax the credit rating pressure and a potential raising would mean a better credit-profile for Portugal.