Updated from 3:50 a.m. EDT

NEW YORK ( TheStreet) -- Moody's downgraded Portugal's bond ratings to A1 from AA2, saying the country's growth prospects remain weak. The outlook is stable.

Moody's said feeble growth and rising debt over the past two years will continue to sap Portugal's fiscal strength.

Portugal has enacted an austerity package to slash the debt but has struggled to find new sources of economic growth.

-- Reported by Joseph Woelfel in New York.

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