LER E TENTAR COMPREENDER A STANDARD & POOR´S: KAI STUKENBROCK

Fiscal and economic structural weaknesses in our view leave the Republic  of Portugal in a comparably weak position to address the significant  deterioration in its public finances and expected lackluster economic  growth prospects over the medium term.
We are lowering our long-term ratings on Portugal to 'A-' from 'A+' and  the short-term ratings to 'A-2' from 'A-1'.
The negative outlook reflects our assessment of the risk of a further  downgrade should fiscal consolidation fall short of expectations or  should concerns over government liquidity mount.

FRANKFURT (Standard & Poor's) April 27, 2010--Standard & Poor's Ratings 
Services said today it lowered its long-term local and foreign currency 
sovereign issuer credit ratings on the Republic of Portugal to 'A-' from 'A+'. 
At the same time, the local and foreign currency short-term ratings were 
lowered to 'A-2' from 'A-1'. The outlook is negative. The 'AAA' transfer and 
convertibility assessment is unchanged.

"The two-notch downgrade reflects our view of the amplified fiscal risks 
Portugal faces," said Standard & Poor's credit analyst Kai Stukenbrock. "Under 
our revised base case economic growth scenario, we expect the Portuguese 
government could struggle to stabilize its relatively high debt ratio over the 
outlook horizon until 2013. Portugal's public finances in our view remain 
structurally weak, notwithstanding the government's substantial public sector 
reforms of recent years." 

We believe past dependence on now more scarce external financing as a source 
of economic growth, and weak external competitiveness add to the likely 
adverse growth dynamics in Portugal. As a result, to reach its current targets 
we expect that the Portuguese government would need to implement fiscal 
consolidation over and above its current plans. Portugal's fiscal indicators, 
as well as its growth outlook, in our view compare unfavorably with the 'A' 
median for sovereigns.

We have revised downward our growth scenario for Portugal and now expect 
economic activity to stagnate in 2010. In our opinion, the economy's growth 
potential will likely remain subdued, constrained by weak international 
competitiveness, low productivity gains, stagnating investment growth, and 
falling domestic credit as the highly leveraged private sector reduces debt. 

We also consider it likely that relatively rigid product and labor markets 
could impede growth prospects in Portugal, prolonging the adjustment in prices 
and wages we view as necessary to regain external competitiveness. 

The government deficit rose to 9.4% of GDP in 2009 from 2.7% in 2008. The 
government initially chose to implement only limited consolidation measures in 
2010, which is why we expect the deficit to remain high, at 8.5% of GDP in 
2010. However, we understand that the government is now considering 
accelerating some consolidation efforts to 2010 that were initially intended 
for 2011. 

We expect fiscal consolidation to progress at a slower pace than the 
government foresees, achieving a deficit of 4.1% of GDP by 2013. This is 
because we believe that there is implementation risk with regard to the 
government's announced program, particularly given that the minority 
government will need opposition support to pass necessary legislation. We also 
regard the government's growth assumptions as optimistic, in our view 
overstating the fiscal impact of cyclical recovery. 

We expect government debt to continue to rise rapidly, to 95% of GDP by 2013 
from 66% in 2008. Fiscal imbalances and high debt rollover in our opinion 
leave Portugal vulnerable to changes in investor sentiment. The resulting 
interest rate shock or further shocks to economic growth could in our view 
lead to a significantly more pronounced increase in the government's debt 
ratio. 

"The negative outlook on Portugal reflects our assessment of the potential for 
a further downgrade if deficits and debt levels exceed our current 
expectations and if consolidation measures are not fully implemented," said 
Mr. Stukenbrock. "Meanwhile, sustained weak growth in nominal GDP could in our 
view also undermine the government's efforts to improve the general government 
deficit and debt ratios. Downward pressure on the ratings could also result 
from adverse interest rate shocks to government finances." 

We could revise the outlook to stable should the government manage to achieve 
at least its baseline consolidation agenda and put the budget deficit on a 
credible and sustainable downward path, thereby establishing a clear 
perspective for stabilizing and eventually reversing the debt ratio.

Complete ratings information is available to RatingsDirect on the Global 
Credit Portal subscribers at www.globalcreditportal.com and RatingsDirect 
subscribers at www.ratingsdirect.com. All ratings affected by this rating 
action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.  Alternatively, call one of the following Standard & Poor's numbers: 
Client Support Europe (44) 20-7176-7176; London Press Office (44) 
20-7176-3605; Paris (33) 1-4420-6708; Frankfurt (49) 69-33-999-225; Stockholm 
(46) 8-440-5914; or Moscow (7) 495-783-4011.

É estranho que depois de um ano de apoio propositado à economia, como verificado em todas as economias do mundo,e no momento em que se ía retirar esse apoio voltando ao cumprimento do défice, a poor Standard resolva baixar ratings não aguardando pela conclusão do ano.

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