Portugal Faces Downgrade, Moody’s Says

May 6, 2010 Updated: May 6, 2010

Credit rating firm Moody’s Investors Service on Wednesday put Portugal on negative watch for possible downgrade.

The country’s public debt is currently rated at “Aa2” and could fall by one or two grades due to “long-term growth challenges,” Moody’s said in a review notice.

Portugal’s public finances and growth challenges have been compared to Greece, which recently received a bailout package from the European Union and the International Monetary Fund.

“Increased risk discrimination in the financial markets may raise Portugal’s financing costs for some time to come,” Moody’s said.