Moody’s has slashed the credit rating of Portuguese government debt the second time in less than a month from A3 to BAA1.

The news comes just days after a similar downgrade from rival Standard & Poor’s with Moody’s noting that the rating remains on watch for further downgrades.

Three main triggers were attributed to today’s decision, the first of which being the ongoing uncertain political outlook following the resignation of the government after the Portuguese parliament rejected the budgetary measures proposed on 11 March.

Analysts at Moody’s said this has impacted the speed and decisiveness of decision and policy making in the country.

The short and medium term funding issues remain a headache for Portugal too, and the ratings agency noted the recently agreed European Stability Mechanism policy document which stressed that debt restructuring remains a distinct possibility.

Finally, the medium-term implications of last week’s revisions to budget deficit estimates and outstanding government debt for fiscal consolidation also give contributory reasons to the downgrade, the report said.

Moody’s said that the rating of BAA1 was attributed as its analysts believe assistance would be provided from other member states in the event that Portugal requires urgent refinancing until it can access funds from the European Financial Stability Facility.