(Bloomberg) -- Portugal’s government bond rating was raised one level by Fitch Ratings, which said the country’s debt ratio is on a “sharp downward trend.”

The rating was raised to A- from BBB+, with a stable outlook, Fitch said in a statement on Friday. It’s the first time Portugal has a rating in the A range from Fitch, Moody’s or Standard & Poor’s since 2011, the year the country received a bailout from the International Monetary Fund and the European Union.

“We believe there is a high degree of commitment to fiscal consolidation from the current Portuguese government, whose term is due to expire in 2026,” Fitch said.

The country’s economy is expected to slow this year, after bouncing back following the pandemic. Portugal had the third-highest debt ratio in the euro area in 2022 and the European Commission projected in May that it will be ranked fifth in 2023, as its debt ratio drops below the levels of Spain and France.

The Bank of Portugal in June raised its 2023 economic growth forecast to 2.7%, citing the performance of the tourism industry. Government debt fell to 112.4% of gross domestic product in 2022 and the government aims for a budget deficit of 0.4% of GDP in 2023.

Fitch, however, sees Portugal posting a budget surplus of 0.5% of GDP this year, with smaller surpluses in the following two years. It cited the expiration of pandemic- and energy price-related support measures, which are offsetting the effects of tax reductions introduced last year. It sees government debt falling to 104.3% of GDP this year.

Portugal’s 10-year bond yield was at 3.60% on Friday, compared to about 3.18% six months ago . It peaked at 18% in 2012 at the height of the euro region’s debt crisis. 

Standard & Poor’s has a BBB+ rating for Portugal and Moody’s has a Baa2 rating, both with positive outlooks.

(Updates second paragraph to note first A-range rating since 2011.)

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