(Bloomberg) -- Portugal’s government bond rating was raised by S&P Global Ratings as the country brings down its debt ratio.

The rating was revised to A- from BBB+ with a positive outlook, S&P said in a statement on Friday. S&P in September had raised the outlook to positive.

“Portugal’s steep deleveraging is fueling a significant and continued improvement in the country’s external financial position and alleviating external liquidity risks,” S&P said.

Portugal had the third-highest debt ratio in the euro area in 2022, and the European Commission projected in November that it will be ranked sixth in 2023 as its debt-to-gross domestic product ratio falls below the levels of France, Spain and Belgium.

Portugal’s debt ratio dropped to less than 100% of gross domestic product in 2023, one year earlier than the government had previously forecast. Government debt fell to 98.7% of GDP in 2023, the first time since 2009 that the ratio is below the 100% level, the finance ministry said in February.

“Prudent fiscal policies and resilient economic growth” are helping bring the ratio down, S&P said. “We expect this trend to continue, albeit more slowly.”

Portugal will hold an early general election on March 10 after Socialist Prime Minister Antonio Costa unexpectedly resigned in November. He’s been premier since 2015.

“We believe that, following the upcoming general elections in March 2024, the next government will continue to exercise fiscal discipline,” S&P said.

The Bank of Portugal in December cut its 2024 economic growth forecast to 1.2% as it lowered the outlook for private consumption and investment growth. S&P in Friday’s statement forecast a deceleration to 1.4% this year, from 2.3% in 2023.

“Beyond 2024, we expect economic growth will slightly pick up but remain below 2%,” S&P said.

Moody’s Investors Service in November raised Portugal’s government bond rating two levels, citing the economy’s “solid” medium-term growth outlook.

Portugal’s 10-year bond yield was at 3.15% on Friday, compared with about 3.28% six months ago . It peaked at 18% in 2012 at the height of the euro region’s debt crisis, the year after S&P cuts its rating to from A- to BBB, and then to BBB-.

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