Tags: EU | Portugal | Financial | Crisis

Rating Cut Deepens Portugal's Financial Woes

Tuesday, 29 Mar 2011 10:28 AM

Rating agency Standard & Poor's has downgraded debt-stressed Portugal's credit worthiness, deepening the country's financial plight as it fights to avoid a bailout.

The agency said Tuesday it lowered its sovereign credit ratings on Portugal to BBB-/A-3 from BBB/A-2 and said the country's outlook is "negative."

It said Portugal's high debt load and poor growth prospects make it likely the ailing country will need a financial rescue package.

Analysts estimate Portugal would need a bailout of around 70 billion euros-80 billion euros ($98 billion-113 billion).

Portugal's government quit last week in a dispute with its rivals over a debt reduction plan — a development which renewed investor uncertainty and triggered a rise in its borrowing costs.

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