Moody's: Portugal is more exposed to the drop in tourism, but has stable rating

Portugal is among the countries who are the most exposed to the decline in tourism associated with the covid-19 pandemic, according to a report released last Friday by Moody's, which safeguards the stability of the country's rating.

In a report entitled "Exposure to tourism concentrated in southern Europe, but credit profiles remain resilient", moody's financial rating agency includes Portugal in the economies whjich are the most affected by a prolonged decline in covid-19-related to tourism, along with Greece, Malta, Spain, Cyprus, Croatia and Italy.

Moody's has identified that countries with a relatively high rate of domestic tourists are relatively less exposed to the current crisis. Among those countries where tourism is of great economic importance, Italy (51%), Spain (50%) and Portugal (42%) have a relatively high percentage of domestic tourists compared to the total, which mitigates global risks, says the rating agency.

Moody's also mentions the importance of air transport and its limitations for the more exposed countries to this transport vehicle, as a result of the pandemic.

Moody's points out that many of the most exposed countries "have sources of economic, institutional and fiscal resilience that allow ratings stability despite the economic and budgetary impact of the pandemic", noting that "Portugal, Cyprus and Croatia even have positive outlooks in their ratings".

Due to the robustness that countries acquired in the wake of the sovereign debt crisis, Moody's has not changed ratings "for any of these countries since the beginning of the pandemic."

Source: jornal de negocios