The financial rating agency DBRS stated that Portugal, Greece, and Spain are the Eurozone countries least affected by the increase in sovereign financing costs. In a report analyzing nine countries in the single currency, the Canadian agency notes that the negative impact of higher financing costs is largely offset by favorable debt dynamics, supported by solid economic and fiscal performance.
DBRS explains that sovereign bond yields worldwide have risen significantly in recent years due to increased public financing needs, quantitative tightening, and higher risk premiums. The agency carried out projections showing that, while interest expenditure in France and Belgium is expected to increase by 0.9 and 0.6 percentage points of GDP between 2025 and 2030, the variation is much less pronounced in Spain and Portugal (both +0.1 pp) and even negative in Greece (-0.2 pp).
DBRS highlights that, although the three countries face increasing financing costs, the impact on future interest burdens is expected to be modest, with strong economic growth and primary surpluses expected to contribute to a continuous decrease in public debt ratios to GDP. The IMF forecasts that nominal annual GDP growth in these three countries will average 4.4% between 2026 and 2030, significantly above the 3.1% projected for the other six countries analyzed.
The agency concludes that Portugal, Greece, and Spain benefit from more favorable differentials between interest rates and economic growth, and forecasts that the three countries will record primary surpluses throughout the 2026 to 2030 period, reducing their future financing needs. In contrast, with the exception of Italy, all other countries in the sample are expected to record persistent primary deficits in the coming years.
