Fitch Rating issued a double A-minus rating to Portugal warning that if the country did not change its fiscal practices it could be facing debt woes. This news comes at a bad time for the Euro Zone. Their currency is already at a 10-month low against the dollar and talks of Greece bailout have been stewing this week. Fitch said Portugal's government deficit in 2009 hit 9.3% of gross domestic product, much higher than the 6.5% of GDP forecast by Fitch last September, increasing the magnitude of remedial measures needed in the medium term. The government will now need to implement "sizeable" consolidation measures beginning next year, on top of the reversal of the fiscal stimulus this year, in order to meet the deficit target of 3% of GDP by 2013, the agency said.
This news about Portugal will definitely further sag the Euro. The downgrade is not very steep but nonetheless the anxiety in the European market will pick up on this.
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