Key Takeaways
- S&P Global Ratings affirmed Portugal’s 'A+/A-1' credit ratings with a positive outlook, citing resilient economic growth and a projected debt-to-GDP decline to 75% by 2029.
- Morningstar DBRS confirmed the Netherlands at its top-tier AAA rating with a stable trend, supported by a robust institutional framework and resilient 1.4% GDP growth projected for 2026.
- The Federal Reserve released its weekly H.8 report, showing that total bank credit for all U.S. commercial banks reached approximately $17.5 trillion as of mid-August 2026.
- Portugal's fiscal discipline remains a highlight, with the country expected to maintain a downward debt trajectory despite a fragmented political landscape and rising defense expenditures.
Portugal Maintains Positive Trajectory Under S&P Review
S&P Global Ratings (SPGI) affirmed its unsolicited 'A+/A-1' long- and short-term sovereign credit ratings on Portugal this Friday. The agency maintained a positive outlook, reflecting the country's ability to sustain economic growth and wealth levels despite global volatility. Analysts noted that Portugal’s net general government debt is expected to fall to 75% of GDP by 2029, down from its pandemic-era peak of 122%.
The rating agency highlighted that prudent fiscal management will be crucial as the nation absorbs pressures from demographic aging and increased defense requirements. While S&P projects a temporary dip into budget deficits in 2026 and 2027 due to accelerated capital expenditure under the Next Generation EU (NGEU) program, the underlying economic fundamentals remain strong. Resilient tourism and a competitive cost structure continue to support the nation's external position.
Netherlands Retains Gold-Standard AAA Rating
Morningstar DBRS confirmed the Kingdom of the Netherlands at AAA with a stable trend, reinforcing the country's status as one of the world's most creditworthy sovereigns. The agency cited the Netherlands' advanced, wealthy, and productive economy as the primary driver for the confirmation. Real GDP growth is projected to remain steady at 1.4% in 2026, underpinned by robust domestic demand and a strong labor market.
Despite the positive rating, the agency noted that fiscal deficits are expected to widen slightly to 2.5% of GDP in 2026 and 2.9% in 2027. This shift follows the formation of a new government in early 2026 and a subsequent increase in public investment and defense spending. Elevated household debt remains a long-term structural challenge, though Morningstar DBRS considers the risks contained due to the country's strong institutional framework.
Federal Reserve Updates Commercial Bank Data
The Federal Reserve published its latest H.8 statistical release, providing a comprehensive look at the Assets and Liabilities of Commercial Banks in the United States. The data, which is break-adjusted and seasonally adjusted, indicates that bank credit has maintained a steady growth rate of approximately 5.6% year-over-year. Securities in bank credit saw a significant uptick, rising at an annual rate of 9.7% in the most recent monthly data.
Commercial and industrial (C&I) loans showed a slight contraction of -2.4% in the latest period, while real estate loans remained stable with a 2.1% growth rate. This weekly data is a critical indicator for market participants tracking the health of the U.S. financial system and the impact of current monetary policy on lending behavior. The release remains a primary tool for assessing the balance sheets of both domestically chartered and foreign-related banks operating within the U.S.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.