Moody’s Cuts Portuguese Credit Rating to Junk Status

Posted July 5th, 2011 at 5:05 pm (UTC-5)
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Moody's credit rating service has cut Portugal's rating to junk status and says the outlook for the country is negative.

This means that according to Moody's, Portuguese government bonds are a high-risk investment.

The agency says there are heightened concerns that Portugal may not be able to fully achieve the spending cuts, tax hikes and economic growth that are part of its loan agreement with the European Union and International Monetary Fund.

Moody's also says there is a growing risk Portugal may need another bailout.

Portugal took a $113-billion bailout from the EU and IMF in May after parliament rejected former Socialist Prime Minister Jose Socrates' economic reform plans.

Portugal is the third EU member to accept a bailout after Greece and Ireland.