Dagong downgrades Portugal's sovereign credit rating

Dagong Global Credit, China's domestic rating agency, said on Thursday that it has downgraded the sovereign rating of Portugal, as the country's economic and fiscal situation has worsened. The rating for Portugal's local and foreign currency was cut from BBB+ to BB+ with a negative outlook, the agency said in a statement. Dagong said Portugal's economic and fiscal situation has undergone further deterioration since it downgraded the country's rating from A- to BBB+ in March this year. Dagong predicted a 1.7-percent decline in Portugal's economic growth for this year and a 3.5-percent fall in 2012. "Portugal's economy cannot restore positive growth in the medium-term unless fundamental reforms in the country's economic system and structure are undertaken," Dagong said. Dagong also predicted that the deficit ratio of the Portuguese government at all levels will reach 5.6 percent in 2012, and will remain above 3 percent in the medium-term.