The rating agency Fitch has improved the Azores’ rating at the level of the credit risk assessment from ‘BBB’ to ‘BBB+’, with a stable outlook, following developments at national level.
© Lusa
22/09/2026
by
Lusa
In an assessment published on Monday, the agency revealed that it reviewed the long-term (IDR) and short-term (RAA) ratings for ‘BBB+’ and F1 levels respectively.
“The improvement follows Portugal’s recent rise to ‘A+’/Stable. Combined with the high possibility of extraordinary support from the Portuguese central government for the autonomous region, this increase improves the overall credit quality of the Azores”, reads in the publication.
The agency considers that the risk profile of the Azores is “moderately low” and highlights the “diversification” of the region’s revenue, since 52% of revenue comes from taxes and 24% from the State Budget.
“ RAA's revenue is very diverse, with a wide range of taxes. It includes large transfers from central government and the European Union, with a strong growth expectation”.
For Fitch, the Regional Government “showed moderate control” in the management of public accounts, as expenditure increased between 2021 and 2025, 7.4% per year (on average), while revenue grew by 7.1%.
“ We expect the RAA to keep expenditure under control over the next five years, which should result in slower increases in operational expenditure than the growth of operational revenue.”.
The agency stresses that spending adjustment capacity is “moderate”, since Education and Health represent 60% of the regional budget, estimating that the region’s operational balance will increase to EUR 160 million by 2025.
Fitch also expects the region’s balance to improve with the funds of the national recovery and resilience plan and expects an increase in regional public debt in the coming years.
“ We expect the capital balance to be, on average, close to a negative value of EUR 280 million per year between 2026 and 2030, compared to the negative 270 million between 2021 and 2025. As a result, we expect the region’s direct debt to increase slightly to around €3,800 million by 2030 (from 3,179 million in 2025).”.
Fitch went up on September 4th Portugal’s ‘rating’ from ‘A’ to ‘A+’, with a stable ‘outlook’ (perspective), the agency advanced, in a note released on its ‘site’.
“ The rise reflects the strengthening of Portugal’s public finances, including a projected path of reducing public debt and considerably stronger budgetary balances than those of its peers, sustained by a strong political commitment to budgetary prudence,” he said.