Portugal's Rating Slashed


Fitch Ratings on Thursday downgraded Portugal's long-term and local currency ratings to A-plus from double-A-minus, reflecting an even slower reduction in its current account deficit and a much more difficult financing environment for banking.

Fitch said Portugal's budget target for 2011 is extremely challenging and expects recession next year.

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Fitch's action comes two days after Moody's Investor Service warned it may downgrade Portugal's A1 rating by one or two notches after a review that will take up to three months, citing weak growth prospects and high borrowing costs.

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