The Fitch rating agency on Thursday further downgraded Portugal's credit rating, lowering it one notch to A+, the fifth grade from the top. Another agency, Moody's, had warned two days earlier that it was considering downgrading Portugal's credit rating by "a notch or two.", according to dpa. Fitch justified its move by pointing to the slower than anticipated reduction of the country's deficit and the "much more difficult financing environment." Risk premiums on Portuguese bonds had increased considerably over the last few weeks. It will be "extremely challenging" for Portugal to meet its 2011 budget goal, the agency predicted. The country is hoping to lower its deficit to 4.3 per cent of gross domestic product next year - from 7.3 per cent this year. Its parliament recently approved a controversial austerity budget containing tax hikes and social spending cuts. Further measures to boost economic growth and the country's competitiveness were also unveiled last week.
