Market Watch
Portugal's Credit Rating Upgraded to 'A' by S&P: What This Means for Golden Visa Investors
A Strategic Analysis of Portugal's Economic Milestone and Its Impact on Investment Opportunities
Portugal has reached a new milestone in its economic trajectory. S&P Global Ratings upgraded its long-term sovereign credit rating from 'A-' to 'A' with a positive outlook. This upgrade reflects the country's consistent external and government deleveraging, prudent fiscal policies, and economic resilience in an increasingly uncertain global environment.
S&P Global Ratings justified the decision on the rating upgrade:
"On Feb. 28, 2025, S&P Global Ratings raised its unsolicited long-term foreign and local currency sovereign credit ratings on Portugal to 'A' from 'A-' and its short-term ratings to 'A-1' from 'A-2'. The outlook is positive.
Link to the full press release and research note here.
On the fiscal front, Portugal has consistently reduced its government debt, which fell from 134% of GDP in 2020 to approximately 96% in 2024. This pace of deleveraging has outperformed many of its European peers, demonstrating the country’s strong commitment to fiscal prudence.
✔Daily Liquidity: All fund assets are liquid and can be quickly converted into cash.
✔No subscription fees: Zero entry costs, ensuring maximum returns.
✔Low management fee: 1.5%, with a performance fee to align our interests with yours.
✔Choice of share classes: Accumulation (compounded growth) or Distribution (annual income payout - SDIRA compliant).
Unlike Portuguese equity funds (historically underperforming) and closed-end Private Equity funds (with over 8-year lock-up periods), our open-ended strategy prioritizes flexibility, income, and capital preservation, without sacrificing performance.
As Portugal continues its trajectory of economic resilience and fiscal discipline, the Portugal Golden Income Fund remains a compelling option for investors seeking European residency with a secure investment structure.
For investors considering the Portugal Golden Income Fund, this upgrade further reinforces the attractiveness of fixed-income investments while mitigating macroeconomic risks. With 3 Comma Capital’s expert fund management and a robust investment strategy, the Fund offers a secure and structured approach to residency-by-investment.
Contact 3 Comma Capital to explore your investment options.
Portugal has reached a new milestone in its economic trajectory. S&P Global Ratings upgraded its long-term sovereign credit rating from 'A-' to 'A' with a positive outlook. This upgrade reflects the country's consistent external and government deleveraging, prudent fiscal policies, and economic resilience in an increasingly uncertain global environment.
S&P Global Ratings justified the decision on the rating upgrade:
"On Feb. 28, 2025, S&P Global Ratings raised its unsolicited long-term foreign and local currency sovereign credit ratings on Portugal to 'A' from 'A-' and its short-term ratings to 'A-1' from 'A-2'. The outlook is positive.
- Despite a highly uncertain trade and geopolitical environment, Portugal's continual external deleveraging as a share of GDP and current account receipts (CAR) enhances its external profile.
- The country is set to post small budget surpluses over 2025-2028, reducing government debt as a share of GDP faster than most other European sovereigns have since the pandemic.
- We expect relatively smooth policy implementation by the government, geared toward fiscal prudence, despite a fragmented parliament.
- We therefore raised our long-term foreign and local currency sovereign credit ratings on Portugal to 'A' from 'A-' and raised our short-term ratings to 'A-1' from 'A-2'. The outlook is positive."
Link to the full press release and research note here.
Key Drivers Behind the Upgrade
Despite persistent macroeconomic and geopolitical challenges, Portugal has demonstrated strong fiscal discipline, reducing government debt and improving its external financial position. The following key factors influenced S&P’s decision to raise Portugal’s credit rating:1. Robust External Deleveraging and Fiscal Discipline
Portugal’s external position has improved considerably, with a steady decline in external debt as a percentage of GDP. The country has maintained moderate current account surpluses and benefited from European Union (EU) fund inflows. These factors have significantly strengthened its financial balance sheet, reducing external liquidity risks.On the fiscal front, Portugal has consistently reduced its government debt, which fell from 134% of GDP in 2020 to approximately 96% in 2024. This pace of deleveraging has outperformed many of its European peers, demonstrating the country’s strong commitment to fiscal prudence.
2. Economic Growth Outpacing the Eurozone Average
Portugal’s economy continues to show resilience, with real GDP growth expected to average around 2% over 2025-2028—outperforming the projected eurozone average of 1.2%. This strong growth outlook is largely driven by:- Robust Net Exports: Strong service exports, particularly in tourism, have been a major contributor to economic expansion.
- NextGen EU Fund Utilization: Portugal has efficiently deployed the €22.2 billion allocated under the EU’s Next Generation recovery plan, driving public investment and infrastructure development.
- Private Consumption: Wage growth, lower inflation, and easing monetary conditions have supported domestic consumption.
3. Political Stability and Policy Continuity
Despite a fragmented parliament, Portugal’s political environment has remained stable, allowing for the smooth implementation of key economic policies. The government, led by Prime Minister Luís Montenegro, has successfully navigated budget approvals and economic reforms, ensuring continuity in fiscal consolidation and EU fund execution.4. Banking Sector Stability and Improved Capitalization
The Portuguese banking sector remains robust, with strong capitalization levels and improved asset quality. Key highlights include:- Higher Profitability: Portuguese banks are expected to maintain solid profitability, with an estimated return on common equity of around 12% in 2025.
- Stronger Capitalization: As of September 2024, the sector's common equity Tier 1 ratio stood at 17.7%, reflecting improved financial stability.
- Low Loan-to-Deposit Ratio: With a loan-to-deposit ratio below 80%, Portuguese banks are well-capitalized and primarily funded through deposits, reducing external financing risks.
Implications for Investors: Why This Matters for Portugal Golden Income Fund
The Portugal Golden Income Fund, managed by 3 Comma Capital, stands to benefit significantly from Portugal’s strengthened economic and fiscal position. The credit rating upgrade enhances the attractiveness of Portuguese fixed-income investments, which form the core of the fund’s bond-focused strategy.1. Enhanced Stability for Bond Investors
With Portugal’s sovereign credit rating now at ‘A’, the overall risk perception of Portuguese debt instruments has declined. This benefits the Portugal Golden Income Fund, which allocates 70% of its portfolio to Portuguese investment-grade corporate bonds. Key advantages include:- Lower default risk on Portuguese bonds, increasing the fund’s overall stability.
- More attractive risk-adjusted returns, particularly for investors prioritizing capital preservation.
- Improved liquidity and pricing efficiency, as higher-rated debt tends to attract more institutional investors.
2. Favorable Market Conditions for Fixed-Income Investments
Portugal’s commitment to fiscal prudence and external deleveraging further reinforces the case for fixed-income strategies. The Portugal Golden Income Fund, by focusing on corporate bonds from both listed and non-listed Portuguese companies, provides investors with a stable yield-generating investment within the Golden Visa framework.3. Reduced Interest Rate Volatility
The European Central Bank (ECB) is expected to continue its cautious approach to monetary policy, stabilizing interest rates. This benefits bond-focused funds like Portugal Golden Income Fund, as lower volatility in interest rates translates to more predictable returns.4. Strengthened Investor Confidence in Portugal’s Economic Trajectory
The S&P upgrade will likely attract more institutional and foreign capital to Portugal. For investors considering the Golden Visa through fund investment, the Portugal Golden Income Fund offers:- A regulated, CMVM-compliant investment structure that meets Golden Visa eligibility requirements.
- Diversified exposure to Portuguese corporate bonds, reducing market volatility compared to equity-heavy alternatives.
- Daily liquidity and professional fund management, ensuring investors maintain financial flexibility while securing their path to European residency.
For investors, this translates into a highly favorable environment for fixed-income investments, particularly those aligned with Portugal’s ongoing economic stability.
Portugal Golden Income Fund is uniquely positioned to leverage these macroeconomic advantages, offering investors:
✔Open-ended structure: Perpetual fund with no lock-up period, and a fair early exit policy (0% redemption fee after 5 years).✔Daily Liquidity: All fund assets are liquid and can be quickly converted into cash.
✔No subscription fees: Zero entry costs, ensuring maximum returns.
✔Low management fee: 1.5%, with a performance fee to align our interests with yours.
✔Choice of share classes: Accumulation (compounded growth) or Distribution (annual income payout - SDIRA compliant).
Unlike Portuguese equity funds (historically underperforming) and closed-end Private Equity funds (with over 8-year lock-up periods), our open-ended strategy prioritizes flexibility, income, and capital preservation, without sacrificing performance.
As Portugal continues its trajectory of economic resilience and fiscal discipline, the Portugal Golden Income Fund remains a compelling option for investors seeking European residency with a secure investment structure.
Conclusion
Portugal’s credit rating upgrade to ‘A’ underscores its remarkable progress in fiscal consolidation, economic resilience, and financial stability. As the country continues on this trajectory, it stands as a model for disciplined economic governance within the eurozone.For investors considering the Portugal Golden Income Fund, this upgrade further reinforces the attractiveness of fixed-income investments while mitigating macroeconomic risks. With 3 Comma Capital’s expert fund management and a robust investment strategy, the Fund offers a secure and structured approach to residency-by-investment.
Begin Your Investment Journey
For more details on how the Portugal Golden Income Fund aligns with the latest macroeconomic trends and Golden Visa eligibility, get in touch with our team today.Contact 3 Comma Capital to explore your investment options.
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Duarte Caldas
Investments Principal
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With more than 20 years of experience in financial markets, Duarte specialized in the energy area in the last decade, where he had the opportunity to work with the main European Power and Gas institutions at CIMD Group. Previously, he worked as Market Strategist at IG Markets Iberia.
