The financial rating agency Fitch raised Portugal's rating from A to A+, a decision justified by the reduction of public debt (which should fall to 87% of GDP), the improvement of budget balances and economic growth of 2.1% this year, above that of the eurozone. Portugal thus joined the ranks of France and countries such as Estonia, Lithuania, Slovenia and Malta, being only behind six eurozone countries. However, the article warns that the good indicators did not save Portugal when it came to obtaining financing in the markets, with Portuguese public debt yields rising driven by geopolitical tension in the Middle East.
The European Central Bank decided to raise all three key interest rates by 25 basis points, due to inflation not heading towards the 2% target and price pressures caused by the escalation of the conflict in the Persian Gulf. The price of Brent crude exceeded the 100-dollar barrier, raising eurozone inflation to 3.3% in August. Some analysts anticipate a further increase by year-end.
In Portuguese domestic politics, Prime Minister Montenegro deployed two cards to silence the contestation of Minister Luís Neves during a Chega motion of censure: a reduction of income tax up to the sixth bracket and an extraordinary supplement for pensions up to 1,611 euros, totaling 800 million euros. The far-right party AfD achieved a historic victory in Saxony-Anhalt, becoming the largest party in that German region.
Portugal implemented the new electronic border system (EES), ending passport stamps for those arriving from outside the European area. The Government warned that non-Schengen flights may face longer wait times and stated it is working on improving procedures and technological solutions.
