Portugal’s net financial position 100% in the red

Portugal now has a net financial position vis-à-vis the rest of the world of -100,0% of GDP, slightly less negative than the -106,6% recorded in the previous year.

The Portuguese economy’s net lending capacity declined slightly, while its net financial position compared to the rest of the world is now less negative.
On Thursday, 9 July, the Bank of Portugal released data on the national financial accounts for the first quarter of 2020, which show a slight drop in the net financing capacity of the Portuguese economy, which stood at 0,7% of GDP, 0,2 percentage points less than in the same period of 2019.
This result stems from the financing capacities of financial companies (2,5% of GDP) and individuals (2,1% of GDP) which together exceeded the needs of non-financial corporations (3,7% of GDP) and public administration (0,1% of GDP).
Compared to the previous period, the last quarter of 2019, only individuals increased their financing capacity, by 0,5 pp. The remaining sectors saw a decrease in the indicator, with the government registering a reduction of 0,3 pp, non-financial corporations of 0,2 pp and financial companies of 0,1 pp.
As for net positions by sector, only individuals showed a reduction in the ratio of their net financial assets as a function of GDP, with a drop of 1,4 pp. Non-financial corporations and public administrations had positive variations in this ratio of 2,9 and 4,1 pp, respectively, although negative values continue to occur in both cases.
Portugal now has a net financial position vis-à-vis the rest of the world of -100,0% of GDP, slightly less negative than the -106,6% recorded in the previous year.